Res­i­den­tial sales drop in NCR

HT Estates - - FRONT PAGE - Ash­wini Ku­mar Sharma ash­[email protected]

De­vel­op­ers are find­ing it dif­fi­cult to hold on the story that the real es­tate sec­tor is re­cov­er­ing, espe­cially in the Na­tional Cap­i­tal Re­gion (NCR). While on an av­er­age, sales have in­creased marginally in eight metro cities, they have dropped sig­nif­i­cantly in NCR.

Ac­cord­ing to the Res­i­den­tial Real Es­tate Mar­ket Re­port for July-Septem­ber quar­ter 2018-19 by Li­ases Fo­ras, a Mum­baibased real es­tate rat­ing and re­search firm, “Dur­ing the quar­ter, res­i­den­tial real es­tate sale in­creased by 1% as com­pared to the last quar­ter in eight cities. How­ever, NCR and Pune have recorded a quar­ter-on-quar­ter (q-o-q) drop of 12% and 1% in sales, re­spec­tively, in the same quar­ter.”

The re­port cov­ers NCR, Mum­bai Metropoli­tan Re­gion (MMR), Ben­galuru, Chen­nai, Hyderabad, Pune, Ahmed­abad and Kolkata.

The re­port also in­di­cates a drop of 16% in the num­ber of new project launches dur­ing the quar­ter end­ing Septem­ber 2018 com­pared to the pre­vi­ous quar­ter (June 2018). How­ever, de­spite drop in project launches, the in­ven­tory of un­sold res­i­den­tial units has in­creased.

“Un­sold stock in­creased by 1% on a year-on-year (y-o-y) ba­sis and on q- o- q ba­sis the un­sold stock has grown marginally,” said the Li­ases Fo­ras re­port.

Kolkata wit­nessed the high­est in­crease of 28% y-o-y in un­sold stock, fol­lowed by Hyderabad and Chen­nai show­ing 25% and 15% y-o-y growth, re­spec­tively. On the other hand, Hyderabad and Chen­nai recorded max­i­mum q-o-q in­crease—that of 5% be­tween Q1 2018- 19 and Q2 2018-19 in the un­sold stock.

The good news for po­ten­tial home buy­ers is that prices ei­ther re­mained stag­nant or dropped dur­ing the quar­ter in the cities men­tioned ear­lier.

AspertheLi­ases Fo­ras re­port, “Weighted av­er­age prices across all tier-I cities re­mained stag­nant on an an­nual ba­sis and wit­nessed a dip of 1% on quar­terly ba­sis.”

An­other re­port by Anarock Prop­erty con­sul­tant, a real es­tate con­sul­tancy firm, for the Septem­ber 2018 quar­ter also paints agrimpic­ture for the NCR mar­ket.

While the re­port said sales have im­proved in seven met­ros, in­clud­ing NCR, it is scep­ti­cal about the lat­ter’s res­i­den­tial mar­ket. “The realty mar­ket of Delhi-NCR has been one of the worst-af­fected in the coun­try amongst other prom­i­nent cities post the slow­down due to re­for­ma­tory changes in­clud­ing DeMo, RERA and GST. While other cities in­clud­ing Ben­galuru and MMR have gained sig­nif­i­cant mo­men­tum with the dust of these poli­cies fi­nally set­tling in, Delhi-NCR is yet to come any­where close to its peak lev­els,” said the re­port.

Be­sides these rea­sons, there are var­i­ous other fac­tors that have con­trib­uted to the slow­down of real es­tate, espe­cially in NCR.

As per the Anarock re­port, other fac­tors are “cash crunch re­sult­ing from de­vel­op­ers si­phon­ing off funds for other projects (or even other pur­poses), ‘ Tweaked’ project de­tails to by­pass en­vi­ron­men­tal/reg­u­la­tory clear­ance norms, con­stantly chang­ing reg­u­la­tions, the wa­ter and sand cri­sis, and bu­reau­cratic quag­mire en­coun­tered in project clear­ances.”

A large num­ber of projects, at var­i­ous stages of con­struc­tion in the NCR res­i­den­tial real es­tate mar­ket, are stuck in court cases. “Out of the to­tal 200,000 units stuck in var­i­ous stages of (non) com­ple­tion in en­tire NCR since their launch in 2013 or be­fore, as many as 130,000 units be­long to Noida and Greater Noida com­bined—a mas­sive 65% of the en­tire stuck in­ven­tory in NCR,” said the Anarock re­port.

If you are look­ing to buy a house for end use, this could be the right time to get good bar­gains, but do your due dili­gence be­fore you seal the deal.

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