The sluggish residential property market has hit Delhi-NCR the hardest with sales dropping big time in the June-September quarter to 13,820 units from 15,001 units in the comparable quarter last year. This translates in a drop in sales of 12 per cent and spells trouble for builders and the downstream economy too. The marked downward trend is evident in the capital region as there was a fall in sales of 8 per cent from the previous April-June quarter too.
Delhi-NCR’s poor showing becomes even more startling when we see the all-India figures showing a marginal growth in home sales for the second quarter (Q2 2018) period. According to the quarterly survey by property tracker Liases Foras, 8 tier-I cities recorded sales of 70,435 units, up from little less than 70,000 units in the immediate previous quarter, this year. If it’s any consolation, on a year-on-year basis, the latest July-September sales have grown by 9 per cent from last year.
Leading the pack was Bengaluru (26 per cent) and Hyderabad (24 per cent), while sales in Chennai witnessed a growth of 21 per cent followed by Kolkata (16 per cent), MMR (13 per cent), Ahmedabad (12 per cent) and Pune (8 per cent). (See table)The CEO of Liases Foras, Pankaj Kapoor, said that the unexpected NBFC payments crisis that led to a run on the stock markets for some time, contributed to the renewed sluggishness in sales.
In the case of Delhi-NCR, the failure of delivering flats against bookings and prepayment, and multiple cases by home buyers against prominent builders such as Unitech, Amrapali and others have only added to the wait-and-watch approach by consumers.
Expectedly, sale prices have being holding their own, with a marginal rise in a few cities. In the July-October quarter, the weighted average price softened by 1 percent, compared to the previous quarter, according to the Liases Foras report. Cities which showed some robust sales, also displayed prices going up marginally - in Hyderabad they went up by 3 per cent, and in Bengaluru prices increased marginally by 1 per cent.
Delhi-NCR and Chennai witnessed a decline in prices of 4 per cent and 1 per cent respectively, while prices in Ahmedabad, Kolkata, MMR and Pune remained stagnant.Traction, if any, was contributed by budget homes. Close to 55 per cent of the sales of this quarter were contributed by the sub-`50 lakh segment. Of this, it was the `25-50 lakh category that grew the fastest showing a 16 per cent increase in sales from the comparable period last year.
Another report by Anarock Property Consultants said 35 per cent of the new launches in the Mumbai region had moved to the periphery zones of the city and 54 per cent of the new supply this year was priced below `80 lakh.
Liases Foras, on the other hand, says there was a quarterly drop of 18 per cent in sales of units priced below `25 lakh, but no reason was ascribed to this phenomenon. It is however known that builders in the bigger cities have very little offering in this below-`25 lakh category because of high land prices.