The prices of houses have come down by up to 30 per cent over the last four months but weak consumer sentiments continue to prevail resulting in subdued demand, says realty consultant Jones Lang LaSalle Meghraj (JLLM).
Affordability metrics for homebuyers have started to improve since October due to the sharp correction in property prices, reduction in mortgage rates and smaller unit sizes per apartment, it said.
"Currently, transaction prices in most markets are down by 25-30 per cent across the board," JLLM Chairman and Country Head Anuj Puri said.
Weak Diwali sales last year and a "virtual standstill" in incremental credit lending during October-December period of the current fiscal have forced developers to mark down their asking rates, he added.
"Price corrections are more pronounced in new launches than existing projects, which are mostly sold to end-users or investors and hence are cost covered," Puri said.
He, however, said demand for housing properties remains subdued with end-users postponing their home-purchase decisions given an uncertain job market and expectation of further price corrections.
The consultant said though many developers have shifted their focus towards building affordable houses in the last few months, but due to thin margins on account of high costs of existing land inventories (mainly acquired over 2006-08) and the current level of construction costs, companies are finding it difficult to remain afloat.
"JLLM expects Rs 1,800-Rs 2,000 per sq ft as the bare minimum pricing level in the current market," Puri added.
