Sales of residential units witnessed up to 50% decline in all the major markets of the country during FY15 as consumers slowed investments in real estate projects, reports Priyanka Ghosh in Mumbai. Analysts said that the focus has shifted to need-based demand. Sales fell across markets and segments (affordable, mid-range and luxury offerings) even as prices largely remained stable. Prices across segments, however, did not increase beyond 10-11% in major cities. New project launches have also declined by 55% in the past two years and stood at a record low at the end of the first three months of the current calendar.
Developers said that the tepid demand was also a result of a sharp rise in prices in the three years preceding 2014. “In some of our projects, prices increased by 60% or so between 2011 and 2013, but income levels did not increase at this pace. At the same time, interest rates remained high impacting affordability adversely,” Sunil Mantri, chairman of Mantri Realty, a major residential player with projects in Mumbai, Bangalore and Pune, said.