Recovery visible in south India's residential real estate market
BENGALURU | MUMBAI: The residential market in south India is seeing some green shoots with the unsold property inventory there declining rapidly compared to other parts of the country.
According to Anarock Property Consultants, unsold inventory during the third quarter declined by 21%, 20% and 15% in Hyderabad, Chennai and Bengaluru, respectively, from the 2016 year-end stock, which was mainly attributed the restricted supply of fresh projects in these cities.
“With an overall unsold inventory decline of only 8% in the top seven cities, South Indian cities have surely bucked the trend,” said Anuj Puri, chairman of Anarock Property Consultants.
The southern cities saw a steep drop in new launches helping builders to drive sales. According to the report, restricting new launches and focusing on clearing unsold stock in the predominantly end-user driven markets has been a defining factor in South India “Despite no new launches and implementation of RERA and GST, we had clicked sales of ?800 crore in the second quarter,” said Venkat K Narayan, chief executive, Prestige Group.
While 2017 year-to-date supply was down 59% across the top seven cities, compared with 2016 additions, these South India cities registered an average fall of 75%, said the report.
The National Capital Region (NCR), on the other hand, has witnessed a 3-5% decrease in average per sq ft property prices over the past one year between the fourth quarter of 2016 and third quarter of 2017, showed the data.
Currently, NCR has the maximum — 2 lakh unsold units — among all the top cities in India. In this region, Greater Noida has a maximum share of unsold inventory, followed by Gurugram.
The National Capital Region (NCR), on the other hand, has witnessed a 3-5% decrease in average per sq ft property prices over the past year
According to Puri, there are many reasons for the price decrease in NCR. To begin with, excessive delay in project construction and possession has hurt buyers’ sentiments and led to subdued demand. Also, many projects have been stalled due to agitations and litigations.
Developers expect the scenario to see a steady change with increased focus on deliveries and customer experience.
“Customer confidence has and will come back with project deliveries and enhanced focus on overall customer experience. We have been witnessing this with our revamped efforts to expedite construction and project delivery that has led to receipt of occupancy certificates for 2,600 units in the last 15 months, and application for OC of another 3,000 units. Consequently, we have seen a revival in consumer sentiment and increased sales in 2017,” said Sanjay Malhotra, CEO, Emaar India.
According to him, the secondary transactions in the company’s projects have seen an increase, indicating consumer interest in these projects due to focus on faster completion, as it aims to deliver 11,000 units by the end of 2018-19 fiscal. Prices are likely to remain stagnant for a few more quarters.
Factors such as the huge unsold inventory, recent cases of developers’ bankruptcy or insolvency and the huge number of stalled projects have made buyers sceptical about the market. Also, delay in execution and dilution of RERA has dented buyers’ confidence, said Puri.
Let’s block ads! (Why?)
Via:: Economic times – Wealth