From ET Realty
NEW DELHI: Home sales across the top eight cities of India improved 7% year-on-year in the quarter to December 2015 while sales rose 15% on a quarter-on-quarter basis on the back of stagnant pricing and discounts by builders during the festive season, according to a report by property research firm Liases Foras.
The Mumbai Metropolitan Region saw the best sales, growing 35% y-o-y. Sales were up 8% in the NCR market and 11% in Bengaluru. Pune saw sales dropping 18% y-o-y.
According to the report, an aggregate of 78 million sq ft of home space was sold across the eight cities compared with 72.9 million sq ft a year ago.
“It is a buyers’ market today. Geographies, which were predominantly investor driven, are still suffering while areas which were inhabited and more suited to end-users are seeing improvement in sales,” said Pankaj Kapoor, managing director of Liases Foras. “Now the gap between affordability and pricing is reducing.”
Unsold stock increased 21% y-o-y and 5% q-o-q to 1,124.9 million sq ft, with unsold inventory in the NCR rising to 361.1 million sq ft, up 14% over last year, and that in Mumbai rising 28% to 235.9 million sq ft.
Across the top cities, total new launches in the quarter decreased 11% q-o-q to 67.1 million sq ft with Bengaluru witnessing the highest addition of 15.8 million sq ft. The NCR witnessed 61% decline in new launches during the quarter. Of the total, 52% of the new launches were in the price range of 25-50 lakh, indicating a move towards affordable options for home buyers. New launches in the affordable category-under 25 lakh-have increased by 50% over the previous quarter.
“Pricing has stagnated and inventory overhang is reducing because of lower number of new launches. Prices are close to the bottom, so end users are finding value,” said Manoj Gaur, president, Confederation of Real Estate Developers Association of India (CREDAI), NCR, and managing director of Gaursons India, a real estate developer.
To clear their inventory, Gaur said, many builders offered good discounts during the festive season in 2015.
Across the top eight cities, 31% of sales were in the 50 lakh to 1 crore price range while about 30% of sales were in the 25-50 lakh price range.