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Sample this.
In FY17, around 2.03 lakh homes were sold across the top seven Indian cities, in which the share of the top eight listed players was 6% and that of leading unlisted players was 11%. The remaining 83% share belonged to the smaller/unorganised players.
Cut to FY21, around 1.58 lakh homes were sold where the share of the top 8 listed developers stood at 22%, leading unlisted players were at an 18% share while smaller/unorganised accounted for the balance 60%.
Smaller Vessels Stay Away
Real estate development is not a function of social status, muscle power or networking. Primarily, it is about having really deep pockets that can see a developer through the ever changing weather without having to always depend on new sales or favours to stay afloat.
While all of that fitted into just one tiny paragraph, thousands of small/unorganised property developers across India are learning it the hard way - by losing it all and exiting the sector. Whatever little hope of revival they carried in their hearts was neutralized by Covaxin.
And experts think that this is just the beginning. They estimate that the market share of top listed developers will increase from 22% in FY21 to 29% by FY24, per a report by ICICI Securities.Bail, Bail, Bail.
Over the last decade, as large corporates entered the real estate sector, they brought along transparency, better build quality and smoother consumer experiences - core factors that were lacking in the business plan of the smaller developers.
Since today's home buyers hate spending money on antacids and anti-stress medication, they abandoned the smaller builders and instead trusted the large/organised/listed ones with their hard earned money. As smaller players faced a demand crunch, they ran out of banks and NBFCs who could loan them money to continue construction.
The net result? Thousands of builders going kaput with projects midway, leading to a fall in consumer sentiment and trust that the real estate sector will take a long time to recover from.
Fair Weather Ahead
With more on time deliveries, better construction quality and the comfort of working with trusted brands, consumer sentiment across top Indian cities could finally be on recovery mode.