In the first half of this fiscal year, demand within the housing sector dramatically decreased by 35% across tier-II and tier-III cities, as revealed by an assessment from an industry lobby. The evaluation conducted by Assocham indicates that upwards of 20 million individuals residing in approximately 25 tier-II and tier-III cities expressed interest in purchasing dwelling units, only to withdraw their intentions due to escalating borrowing costs.
This scenario has forced numerous real estate developers to delay their project timelines, according to Assocham’s insights. Additionally, the continuous rise in the prices of essential raw materials, including brick, cement, and steel, has exacerbated the hardships developers are facing in the current market environment.
Historically, the property purchase segment in tier-II and tier-III cities exhibited a notable growth rate exceeding 25% during the same time frame last year, which makes the current downturn even more striking. Furthermore, the higher interest rates have disrupted the payment schedules for many borrowers, complicating the overall financial landscape.
The chamber's conclusions draw from feedback obtained from active real estate participants in cities such as Chandigarh, Meerut, Pune, Bhopal, Indore, along with various smaller urban centers nationwide. Notable developers contributing this feedback include Parsvnath, Omaxe, DLF, and Unitech.