Dealers of building products in India are bullish

-Nearly 70% of the dealers saw stagnant or declining growth in the first half of 2017
-A majority expect growth post-GST implementation
-Growth in building products will be driven by both new constructions and home renovations
-Dealers expect to see better growth in the bathroom fittings segment, compared to tiles and sanitary ware

 

September 2017: According to a report published by the United Nations on housing and land rights issues, India is at a critical juncture in terms of protection of the right to adequate housing, which is currently at a tipping point… Over 58.6 million households do not have access to adequate housing in urban and rural India

Residential new builds in urban India have been on a downward trajectory since the highs last seen in 2012-13. Sales have plummeted, and there’s plenty of unsold inventory. To add to the woes of the real estate industry, there was demonetisation in November of last year, and the announcement of implementing the goods and services tax (GST) in January this year. Despite all this, dealers of building products were optimistic that their businesses would improve 2018 onwards.

 

ValueNotes Strategic Intelligence conducted a dipstick survey of dealers in India -of tiles, sanitary ware and bathroom fittings – to gauge their sentiment about the future of the building product sector. The results of the ValueNotes Dealer Sentiment Index survey are available in our report titled Sentiment Analysis of Building Product Dealers in India

 

Some of the key findings of our study included:

  • Nearly 70% of the dealers that we interviewed saw stagnant or declining growth (across products) in the first half of 2017
  • Beyond the initial hiccups that the implementation of GST and the Real Estate Regulation Act (RERA) were likely to cause, dealers were optimistic about the future growth in the real estate sector, and consequently in the building materials industry
  • Growth in building products will be driven by both new constructions and home renovations
  • Amongst the building products that they dealt in – viz. tiles, sanitary ware and bathroom fittings – dealers expected the growth of bathroom fittings to be better in 2018, in comparison to the other two segments

 

Millions of Indians currently live in sub-standard homes. According to Rathin Shah, a project manager at ValueNotes, “Without a doubt, India’s housing sector is facing challenging times.”He adds, “No surprises why the dealers, who participated in our sentiment index, felt the way they did… With the government’s promise of “Housing for All by 2022”, and the Swachh Bharat initiative to improve sanitation, business in India’s building product sector will certainly get better in 2018.”

 

 The survey findings can be downloaded here

 

 

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