The National Capital Region (NCR) has the maximum number of unsold units among all the top cities in India with around 2 lakh unsold units stocked up across different cities in the region, according to a report by Anarock Property Consultants. Greater Noida has the maximum share of unsold inventory, followed by Gurugram, it said. The massive unsold inventory itself has acted as a sentiment suppressant – and finally, while demonetisation, RERA and GST are potentially positive moves for the industry, they have played a significant role in reduced buyer sentiment, contributing to the price falls,” the report quoted Anuj Puri, chairman of the consultancy, as saying. Prices, too, have decreased in NCR. To begin with, excessive delay in project construction and possession has hurt buyer; sentiments and led to subdued demand. Also, many projects have been stalled due to agitations and litigation issues, the report said.
The consultancy remains bearish on property prices. It said prices are likely to remain stagnant for a few more quarters. “Factors such as the huge unsold inventory, recent cases of developers; bankruptcy or insolvency and the huge number of stalled projects have made buyers sceptical about the market,” it said. Further, delay in execution and dilution of RERA have acted as dampeners for buyers’ confidence. Prices are unlikely to rise in near term, it said. Both Uttar Pradesh and Haryana have kept outside the purview of RERA projects that have been issued, or applied for, occupancy certificates. This is a significant difference from the central RERA notified on May 1 this year that had completion certificates as the benchmark for exemption.
On the contrary, the unsold residential property inventory has declined rapidly in South India as compared to other parts of the country. According to the consultancy, the unsold inventory declined by 21%, 20% and 15% in Hyderabad, Chennai and Bengaluru, respectively, in July-September 2017 from 2016 year-end stock, the report said. With an overall unsold inventory decline of only 8% in the top 7 cities, South Indian cities have bucked the trend. While 2017 year to date supply was down by 59% across the top 7 cities when compared to 2016 additions, these south India cities registered an average decline of 75%.
One of the key reasons for this decline was the restricted supply of fresh projects in these cities. The fine equilibrium that developers have achieved in terms of restricting new launches and focusing on clearing unsold stock in the predominantly end-user driven markets has been a defining factor in South India. With fundamental growth drivers intact and rising demand for office spaces, these cities are likely to make a faster come-back in the residential segment as well, when compared to their counterparts in the West, North and East India, it said.