Housing sales fell 2.2 percent to 1.58 lakh units in seven major cities last fiscal, but the market is expected to improve by next March on the back of lower interest rates and fall in prices, says a report.
Property consultant JLL India in its monthly report said housing sales in January-March period of 2016 rose by 9 percent over the previous quarter.
Real estate market is facing a slowdown from the last 3-4 years leading to significant delays in completion of projects and protest by home buyers.
"The real estate sector saw the worst phase in 2015-16 with sales and prices plummeting. High inventory levels, diminished demand and limited liquidity affected new launches.
Overall residential sales were down by 2.2 percent in FY 2015-16," the report said.
As per recent data, JLL said 1,58,211 units were sold in 2015-16 fiscal as against 1,61,875 units in the preceding fiscal in seven major cities - Delhi-NCR, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru and Pune.
"However, a positive twist to this otherwise grim situation is the rise in sales in Q1 of 2016 calendar year.
This quarter saw a sale of 42,521 units compared to 39,001 units sold in Q4 of 2015 calendar year - an increase of 9 percent," the report said.
On the road ahead, JLL said trends are beginning to change on hopes of good monsoon, revival in economy, reducing inflation and residential prices being bottomed out.
"Also, the improving regulatory environment in real estate sector and the decrease in interest rates by the RBI, coupled with schemes such as Smart Cities, AMRUT and 'Housing for All by 2022' are beginning to have a positive influence," JLL India CEO - Residential Services Ashwinder Raj Singh said.
The setting up of the Real Estate Regulatory Authority to ensure timebound delivery of projects and more efficient and transparent dealings with developers point towards consumers gaining trust and coming back to investing in the market.
JLL further said the affordable housing segment has been witnessing increased traction on the peripheries of the major cities. Of the total sales, 60 percent of the properties were priced below Rs 5,000 per sq ft in FY16.
"Global factors do have an impact, but India's current low inflation rate coupled with low interest rates will induce faster growth in the residential real estate sector," Singh said, adding stimulus provided in the Budget, improved funding for the industry and the clearing of roadblocks on REITs would also help revive the market.
Most convincing signs of revival should be visible by October-December or the January-March period, he added.
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