1.70 lakh housing units remain unsold in Delhi NCR
Demand for residential flats also dropped by 35% this year, a survey of 120 developers by Assocham revealed
The news is not good. About 1.70 lakh housing units are available in the NCR residential market, with 90,000 dwelling units under construction and likely to be further delayed for hand-over, a recent survey by Assocham has revealed.
Reasons for an increase in inventory level has been attributed to falling demand from endusers and investors. So much so, people who usually hunt for ready-to-move-in apartments are staying away from the market, a majority of survey respondents said.
“A large inventory is piling up despite prices correcting by over 20% in the last one year, while there is a huge fall in the new projects being launched by developers who are hardpressed for cash,” stated the survey, in which nearly 120 real estate developers in Delhi NCR participated.
Demand for buying property also decreased by over 30% to 35% over the last year. The ticket price 3-BHK, 2 BHK and single room flats saw correction by 30% in Noida, 25% in Gurgaon and 15% in some key areas of Delhi but still, the demand stayed subdued.
“The sentiment in the housing market is really at a low key. Even though there are signs of macroeconomic improvement, it would be a quite a lag before it gets reflected on the real estate markets,” said DS Rawat Assocham secretary general while releasing the survey.
High levels of debt were one of the major problems developers faced, affecting sentiments and leading to their poor valuations in stock market, limiting whatever chances they had of repairing their balance sheets.” Somehow, it reflects in the timely delivery of the projects, coupled with the problems created by high interest costs despite some course correction by the Reserve Bank of India (RBI),” the paper said.
The residential market has witnessed a steep decline by 30% to 35% in new launches as well as demand, resulting in significant shrinkage. The unsold inventory pressure in NCR region is the highest among all other cities.
According to the majority of real estate developers in NCR regions said, about 60% of the unsold real estate in NCR is in areas which are currently uninhabitable. The sales have slowed down in NCR as well. The problem has been confounded by delays in regulatory clearances and litigations. The NCR residential market still has an estimated 1,67,000 units of unsold inventory which is approximately 30% of the units under construction, adds the survey.
As per the survey, there are nearly 8.5 million workers engaged in building and other construction activities in India.
Average housing prices remained stable in NCR during the year, according to the paper. The inventory level has increased because of the falling demand and sales in the sector as genuine buyers are deterred.