Job insecurity may force people to put off their decision to make a large purchase like a home. The loss of jobs and the erosion of sentiment will have an impact on the sales of homes, Rohit Gera has said
The real estate market in India – and Pune specifically – will be uncertain in 2023 as layoffs in the global tech and IT sector may affect sales, new project launches and pricing, said Rohit Gera, managing director of Pune-based Gera Developments.
“Regardless of affordability, job insecurity may cause people to put off their decision to make a large purchase like a home,” Gera said at the launch of the company’s Residential Realty Report January 2023 edition. “Layoffs in the tech sector and a corresponding erosion of sentiment would have an impact on the sales of homes.”
Gera said rising interest rates have not had much of an impact on the overall market, and while some sales may have been affected, the salary increase over this period has more than compensated for the rise in interest rates.
“The future, however, has greater uncertainty due to macroeconomic and global factors,” he said. “We see increased global headwinds and layoffs affecting employment in the IT sector. We believe a larger issue, in addition to affordability (which is not a cause for concern now), is job security.”
The Reserve Bank of India increased its benchmark interest rate by 225 bps in the first nine months of FY23 to curb inflation, making home loans costlier. Tech companies globally have announced layoffs of 28,096 workers in the first five days of January, exceeding the December figure by 64.5 percent.
Prices Rising
The report on the residential market of the Pune region highlighted that new launches are not growing at the pace seen in the past. Fresh supply in the six months ended December 2022 fell 22 percent from a year earlier and 13 percent from levels in the six months ended June 2022.
Source : Moneycontrol News
Source : moneycontrol.com
