In spite of a fall in prices and interest rates, the demand for residential market has witnessed a steep decline by 25-30% in the whereas the demand for commercial space dropped by 35-40% in the NCR region over the last year, an ASSOCHAM study has pointed out.
Mumbai which had been witnessing an increased activity around Navi Mumbai, Thane and other suburbs, is carrying the second largest inventory, followed by Bengaluru and Chennai.
While Mumbai had unsold sold of 27.5 per cent, for Bengaluru it was 25%, Chennai (22.5%), Ahemdabad (20%), Pune(19.5) and Hyderabad (18%) , the ASSOCHAM paper noted.
It said the NCR residential market has an estimated 2,50,000 units of unsold inventory which is approximately 35% of the units under construction due to delay in regulatory clearances and litigations. It is a difficult period both for the developers and the consumers who have booked flats. The regulators, developers, banks and consumers should form joint groups to work out the solutions," ASSOCHAM Secretary General Mr D S Rawat said.
The ticket price (of) three-bedroom, two-BHK and single room flats has seen correction by 35 per cent in Noida, 30 per cent in Gurgaon and 25 per cent in some key areas of Delhi but still, the demand stays subdued, the paper said.
This year, the unsold inventory in residential real estate was the highest in Delhi-NCR at 2,50,000 units, followed by the Mumbai metropolitan region at 98,000. Bangalore came next with 66,000 units, Chennai with 60,000 units and Pune followed with 55,000 units, adds the ASSOCHAM recent findings.
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The subdued construction activity has had a huge negative impact on the labour market since there are about 10 to 12 million workers engaged in the real estate sector. The slump in sales and launches clearly indicates that the residential market is facing a strong price resistance
As per the report, many stakeholders include developers, financial institutions and other supply-side stakeholders believe that the current market scenario is worse compared to last year. Delayed reforms seem to have affected sentiment. Residential launches, sales, and price appreciation are at a much lower level than the last year.
The total number of new project launches in the National Capital Region (NCR) had come down by 30-35 per cent in comparison to the last year. The finances are getting choked and are being forced to cut prices to some extent, said ASSOCHAM Real Estate report. The unsold inventory is highest in Noida, with over 1,20,000 lakh units while the remaining unsold inventory is in Delhi, Ghaziabad and Faridabad.
The further revealed that the NCR residential market is stuck with an estimated inventory of 2,50,000 units while another 1,75,000 dwelling units under construction are likely to be delayed for handover, adds the paper.
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