Note ban-hit NCR re­alty mar­ket likely to re­cover this year

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - HT Es­tates Cor­re­spon­dent ■ ht­es­tates@hin­dus­tan­

The NCR res­i­den­tial mar­ket has been un­der pres­sure and 2016 was no dif­fer­ent. The mar­ket, in a down­ward slide since 2010, hit a new low with ev­ery pass­ing year. In the first half of 2016, other ma­jor ci­ties in the country fared well but NCR was the worst per­form­ing mar­ket. In the sec­ond half of 2016, the mar­ket wit­nessed neg­a­tive de­mand and sup­ply went down by 29% and 73%, re­spec­tively, com­pared to the same pe­riod in 2015.

As far as the new launches are con­cerned, on a yearly com­par­i­son, those in the NCR mar­ket dwin­dled to 26,735 units in 2016 reg­is­ter­ing a year-on-year 58% drop from 2015. The fes­tive sea­son failed to in­fuse any life in the dull mar­ket and sales fur­ther fell to 40,005 units in 2016 from 48,800 units in 2016, reg­is­ter­ing a year-on-year drop of 18%, says a re­cently launched re­port ti­tled In­dia Real Es­tate by Knight Frank In­dia.

Pil­ing up in­ven­tory, lack of con­sumer con­fi­dence due to lit­i­ga­tions and in­fra­struc­ture de­lays were some of the ma­jor fac­tors that have de­cel­er­ated new launches in NCR. The mar­ket dy­nam­ics have be­come such that to­day only a ready-to-move-in prop­erty at­tracts the buyer. The largest ur­ban ag­glom­er­a­tion of the country has the high­est un­sold in­ven­tory un­der dif­fer­ent stages of con­struc­tion, but is still strug­gling to find buy­ers. If this was not enough, the par­tial im­ple­men­ta­tion of the Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Act, 2016, in the first half of 2016 ,hit the slug­gish mar­ket again. New launches came to a stand­still with de­vel­op­ers rush­ing to com­plete their pend­ing projects. The rush stems from the fact that if a project is not com­pleted be­fore the full im­ple­men­ta­tion of the Act, the pro­moter will need to get the project reg­is­tered with the author­ity and then com­plete it within the stip­u­lated time, says the re­port.

As per the sur­vey, the mar­ket did start giv­ing in­di­ca­tions of mar­ginal re­cov­ery in the third quar­ter owing to de­vel­op­ments like project de­liv­er­ies, re­duc­tion in prices and im­prov­ing in­fra­struc­ture in places like Noida Ex­ten­sion and Noida–Greater Noida Ex­press­way. Although the third quar­ter num­bers for NCR were not very en­cour­ag­ing when com­pared to the peak of 2012, some prom­i­nent de­vel­op­ers, es­pe­cially in Noida and Greater Noida, reg­is­tered a slight in­crease in their sales in the third quar­ter of 2016 as com­pared to the same pe­riod in 2015, thereby in­di­cat­ing im­prov­ing mar­ket sen­ti­ments. In­stances like sale of units of over ` 3 bil­lion on the first day of the launch of a 100acre town­ship in Greater Noida was a testament to the im­prov­ing sen­ti­ments.

How­ever, the most re­cent move by the govern­ment on Novem­ber 8 to clamp down on black money nipped this mar­ket sen­ti­ment in the bud and has brought the NCR real es­tate mar­ket to its knees.

The fourth quar­ter num­bers are ev­i­dence to the im­pact of the de­mon­eti­sa­tion. Sales vol­umes dropped by 53% year-on-year and new launches fell by a mas­sive 73% dur­ing the same pe­riod. At only 6,765 units, the sales vol­umes are at their low­est quar­terly lev­els since 2010, down by 79% since the quar­terly peak of 31,990 units in the fourth quar­ter of 2010.

The new launches have fared much worse at just 3,710 units in the fourth quar­ter of 2016, which is 91% lower than the peak of 40,136 units wit­nessed in the same pe­riod of 2010. As the sales num­ber for the first nine months had shown an op­ti­mistic trend, 2016 would have been at par with 2015 had it not been for the de­mon­eti­sa­tion move. The new launches in NCR have come down to a stag­ger­ing 9,273 units in the sec­ond half of 2016 reg­is­ter­ing a year-on-year drop of 73%.



Pil­ing up in­ven­tory and in­fra­struc­ture de­lays have de­cel­er­ated new launches in NCR.

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