"Companies book and lease space keeping three- to five-year horizon. But given the slowdown in economy, they tend to scale down their demand projection of space. Reduction in demand means more supply hitting the market," said Jai Mavani, executive director, KPMG.
Slump in housing
Residential demand, which is more sensitive to interest rate movement, has cooled in recent times, though developers are reluctant to admit this.
However, it is a fact that property transactions have dropped and the rate of new home loan disbursals has also fallen.
The State Bank of India, the country's largest lender, saw a home loan portfolio growth rate of 16 per cent in 2007, slower than the 20 per cent growth witnessed in 2006.
SBI has cut home loan rates twice since January 2008, a bank executive said, adding that there was no visible growth as yet in the home loan portfolio. "Property prices are still high and people still cannot afford flats in big cities," he added.
Image: A labourer works on the construction site of a shopping mall in Delhi
Photograph: Tauseef Mustafa/AFP/Getty Images
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