Buried under high debt and inability of the developers to
complete and hand over the pending projects well beyond the commitments to the
hard-pressed consumers, the troubled Indian housing sector is not witnessing
any festive activity this year despite the latest cut in the policy interest
rate by the Reserve Bank of India (RBI), an ASSOCHAM survey has said.
Based on the data and information collected from 250
builders in the Delhi-NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad,
Hyderabad, Pune, Chandigarh and Dehradun, the survey found that the demand for
new projects is hard to come while new launches have come to a trickle, marked
by lack of consumer confidence and cash deficit of the builders.
Under such a scenario, the demand for new launches, if at
all there are, has come down by over 50-60 per cent in Delhi-NCR and Mumbai
while it is lesser by about 40-45 per cent in Hyderabad and Chennai. In
Bengaluru, the activity has come to a total standstill, first by the demolition
drive and then by Cauvery dispute agitation, adds the recent survey.
“Whatever market is there, it is mainly for the end-users
and not for investors, sale has been increased for the smaller units (2 BHK
& 3 BHK)”, reveals the survey.
“Customers are preferably looking for ready to move in
property rather than going for under construction property. But not many
properties fall in this category”, adds the Secretary General D S Rawat.
The resale or secondary market is also dull this festival
season, marked by drop of at least 20-25 in prices this festive season. There
is very little resale happening especially in the NCR and surrounding areas.
Supply is in excess with private small time builders in the unorganised sector
flooding the market with units.
The unsold inventory pressure in NCR region is the highest
among all other cities. The NCR residential market still has an estimated
1,70,000 units of unsold inventory which is approximately 30% of the units
under construction, adds the survey. As per the survey, there are nearly 8-10
million workers engaged in building and other construction activities who face
uncertain future if the sector does not revive.
The ticket price 3-bedroom, 2 BHK and single room flats has
seen correction by 30% in Noida, 25% in Gurgaon and 15% in some key areas of
Delhi, yet the demand stays subdued
All approvals of real estate projects must be accorded in a
time bound, accountable and simplifies manner, the ASSOCHAM said suggesting that
the process and status of all approvals be made on line so as to bring
transparency.
The property analysts have predicted that till March next
year the demand for plots, houses and flats may drop by at least 15 to 20%. The
housing inventory in the NCR area is huge as a large number of projects are
coming up in the peripheral areas, said Rawat.
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