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Developers may cut home prices by 15% in national capital region (NCR) and Mumbai and 10% in Bangalore due to liquidity concerns and high inventories, said analysts from Edelweiss Securities.
"Led by liquidity concerns and elevated inventories, we cut our estimates for volumes and average realisations across our coverage companies, with NCR and Mumbai being more impacted than Bangalore,"said Aashiesh Agarwaal and Akshay Rao, analysts with Edelweiss Securities said.
Edelweiss said both Mumbai and NCR are seeing elevated levels of 41 inventory months. Post strong launches and stable sales, Bengaluru inventory levels too have increased to 31 months from 23 months during fourth quarter of FY13.
"We expect near term performance of the sector to remain muted driven by an unfavorable environment, liquidity concerns, stressed balance sheets, defaults in the system, inventories at considerably high levels, weakening demand outlook and overhang of elections," Agrwaal and Rao said.
