 "Home buyers wary of new purchases, developers launches")
In the last exhibition held in November 2012, the last count of visitors was 97,176. While MCHI-CREDAI Property 2012 had 120-plus developers, the 2013 edition saw just 102 developers.
Many prominent names such as Omkar Realtors and Runwal group were absent from the exhibition and only 12% of the projects exhibited were new projects. According to sources in MCHI, the exhibition did not translate into big sales for the developers.
Also Read
Though summers are not great season for developers vis-à-vis the winter season which houses many festivals such as Dussera, Diwali, and Christmas, but both buyers and developers are cautiously moving ahead with home buys and launches respectively.
Look at the numbers. Absorption of homes in national capital region (NCR) has declined 12% in the second half of FY 2013 as compared to corresponding period of last year, according to global consultant Knight Frank.
The number of launches has also declined by 31% in H2 of FY 2013 as compared to corresponding period of previous financial year.
“Buyers are clearly adopting wait and watch policy. Whether it's investor or buyers, they are not confident of buying homes now,” said Samantak Das, director, research at Knight Frank.
“Apart from RBI cutting rates, nothing much has changed on economy front,” Das added.
Mismatch on pricing expectations is main issue in improving sales momentum, say analysts and consultants.
Parikshit Kandpal, an analyst with Kharvi Broking, in an April 16 report, said a few developers were offering Rs 300-500/sq ft discount during the Mumbai exhibition which translated to a 5% discount on properties to evince buying interest.
“Buyers sentiment is at all time low as 20-30% price correction is required for return of affordability,” Kandpal added.
Added Sanjay Dutt, managing director of global consultancy Cushman & Wakefield, “There is a mismatch. It is wrong for buyers to assume that every developer is in a bad shape. Developers are also not sensing the situation and offering attractive prices in many places.”
Developers said they are not in a position to cut prices due to increase in input prices, high borrowing costs and so on.
“Buyers expectations are high but developers are not in a position to cut prices due to various factors,” said Paras Gundecha, president of MCHI-CREDAI.
However, Rajeev Talwar, group executive director, DLF, said buyers were waiting for the rates to come down after inflation cooled down to sub 6% levels in March than waiting for the prices to come down.
Developers like Gundecha say launches in Mumbai are low given the delay in permission especially for high rise buildings.