PANAJI: Poor sales and a slump in the economy have caused real estate inventory to pile up across the state, despite a slowdown in project launches. Though not as acute as in major cities, stakeholders estimate that the percentage of unsold inventory could be around 30% in Goa.
Goa’s economy crashed in 2012 after the ban on mining, joining the country’s stagnant economy. This, coupled with high interest rates, made genuine home seekers shy away from the market. Since then, sales have taken a hit and prices have remained relatively stagnant compared to the 15-20% increase in prices witnessed prior to 2012.
“The department has not undertaken a study, but from inputs that we receive, inventory is hovering around 40%. This may include apartments where nobody is staying. But yes, from conversations that we have with stakeholders there are lot of unsold units. The market has been down for the last three years, since mining closed,” chief town planner S T Puttaraju said.
The number may be alarming, but stakeholders suggest that town and country planning’s (TCP) estimate includes approvals given to projects that may have not been launched.
President of the Goa unit of the Confederation of real estate developers association of India (Credai), Jaganath Prabhudesai while confirming that there is no credible data to identify unsold inventory, argued that the number could be in the 20-30% range, a figure that other stakeholders find acceptable.
“Compared to other cities, 20% would be a good estimate. I am talking of ready stock that is not sold. If you include under construction, then it will be higher. A lot of projects are stalled due to lack of sales,” head of sales and marketing Kanchan Desai said.
The market in Goa is fragmented with different trends existing in various pockets.
Devashri developers said that nearly 70% of the market wants projects around Panaji and Porvorim, with a budget of around Rs.50 lakhs, mostly for 2BHKs.
“There is a lot of unsold inventory, but North Goa is going to continue growing. South Goa is finished,” director of Kamat Infra Tech Bharat Kamat said.
A bleak market for real estate developers ensures that customer is king if he or she plays the cards right. “There are buyers in the market at the right price. Right now, whoever wants to buy his first home, this is the right time,” founder president of the Goa association of realtors, Denzil Xavier said. “The inventory will get cleared the moment sentiment picks up.”
To try and woo customers, builders have begun to offer several freebies or discounts. “People expect prices to come down, but that is not happening. But what you see is developers giving cash discounts, white goods like home appliances, club memberships or early bird prizes,” Desai said.
All indicators point to a two-year stagnant period before demand for housing picks up and prices rise. The tussle between developers and customers is turning into a game of who blinks first with the odds evenly stacked though an astute customer could work the situation to his or her advantage.
Credits ET Realty