From ET Realty
GURGAON: Despite the liquidity crisis brought on by high quantum of unsold real estate inventory and decline in prices by approximately 25% in 2015 compared to 2014, most buyers in NCR, especially Gurgaon, still see this market’s prices as unattractive.
According to the latest report by real estate consultant Jones Lang Lasalle, the NCR has witnessed the country’s highest unsold inventory figures at almost 1,70,000 units. “Gurgaon’s contribution to this burden is only around 22,000 unsold units, but this is still uncomfortably high. Another source of worry is that almost 30% of this unsold inventory is under construction, and located in perfectly inhabitable sectors,” said Ashwinder Raj Singh, CEO Residential services at JLL.
The unsold inventory is highest in Noida, with over 1 lakh units while the remaining unsold inventory is in Delhi, Ghaziabad and Faridabad. In its report, ‘Gurgaon Real Estate Pricing Trends – 2015 vs 2016′, JLL claims that the primary reason for this scenario is slowing down of the economy over the years, as well as sky-rocketing prices. The report further says that buyers were waiting for prices to come down, while investors who bought properties in the previous boom cycle of 2009-10 did not want to commit more money with no clear returns.
“The demand for properties priced beyond Rs 3 crore has been on a steady decline, and projects that were launched way back in 2009-10 catering to this premium segment constitute a large part of the unsold inventory,” Singh said. He explained that the 25% decline also constitutes the discounts being offered by the developers owing to the unsold inventory piling up.
Consequently, new launches in the premium space have come down by around 30-35% on a year-on-year basis whereas the affordable housing segment is doing better.
According to Singh, the most popular residential micro markets in the city are Golf Course Road and Golf Course Extension Road with prices at Rs 12,000-15,000 per sq ft and Rs 7,000-10,000 per sq ft, respectively. The most upscale residential catchment happens to be DLF Phase 5 with DLF Camelia being one of the most prime properties, where the price is pegged at Rs 32,500 per sq ft.
Anubhav Jain, director of Group Silverglades, was upbeat about the scenario. Jain said, “A great time for end-users to buy a home in Gurgaon – prices have corrected and plenty of flexibility in payment terms for ready-to-move-in as well as under-construction units. In fact, a great time for existing Gurgaon residents to upgrade to bigger and newer apartments with luxury specs.”