India’s residential property market has been going through turbulent times for past few years. However, things are looking up now with changes in the economy and various initiatives announced by the Government. To understand how various market forces have been making an impact, it is essential to look at the overall economic scenario in the country.
- FY 2015-16 saw Indian economy become the fastest-growing in the world with a GDP growth of 7.6%. This, despite adverse global economic circumstances that put a lot of pressure on earnings, exports and overall development.
- The Government was able to contain the fiscal deficit to the budgetary target of 3.9%, and is working on lowering it further to 3.5% in FY 2016-17
- RBI has cut the key interest rates by 1.5% since January 2015, and the Repo rate has come down to 6.5%. This has started showing a visible positive impact on the economy. Industrial growth crawled back into the positive zone at 2.1% in March ’16, crude oil prices stabilised at a favourable price band for India, CPI inflation decreased further at 4.83%, and there are more-than-optimistic expectations for a good monsoon this year. Factoring all this in, the Indian economy looks well poised to grow at a healthy rate of 7.7-7.8%. Though lower than expectations, inherent weaknesses in the system and inadequate infrastructure development continue to impede faster growth