Housing sales fell 26 per cent in Delhi-NCR in the first half of 2017 as demand continued to be sluggish post-demonetisation despite a price correction of 20 per cent in the last 18 months, according to Knight Frank. Unsold housing stock in the Delhi-NCR property market stood at a staggering 1.8 lakh units — highest in the country — that will take developers four and half years to sell. About 17,188 units were sold in the first half of 2017, compared to 23,092 units in H1 2016, thus registering a drop of 26 per cent, Knight Frank India said.
Housing sales did improve marginally by 2 per cent from the previous six months, which saw lowest half yearly sales due to demonetisation move. “NCR market continues to find newer depth and slide continues. NCR housing market is passing through the worst phase. No end to it,” Knight Frank India Executive Director (Advisory, Retail and Hospitality) Ghulam Zia told reporters.
The consultant released latest report ‘India Real Estate – Residential and Office’ for January-June 2017 tracking eight top cities in the country. On launches, Zia said it hit a “new low” and fell by 73 per cent in the first six months of this year at 4,800 units, 70 per cent of which were below Rs 25 lakh, signalling shift towards affordable housing segment. He attributed the fall in launches to demand slowdown and builders’ focus on completing existing projects in view of the new Real Estate (Regulation and Development) Act.
“Dwindling consumer confidence in the market courtesy delay in projects marred by litigations and poor connectivity in potential growth areas has slowed the market. That slowdown has restricted developers to launch new projects,” the report said. On prices, Zia said the housing prices have fallen by 20 per cent in Delhi-NCR in the last 18 months and rates are likely to fall further or remain stable in the short-term. He said the project cost will definitely come down with the implementation GST, but it has to be seen whether builders transfer this benefit to customers or recover their losses.
Asked about his advice on property buying-selling, Zia said: “Do not buy a house if you are an investor. If there is a need you can buy. You sell only if you are in a distress, which developers are”. Expressing concern over unsold housing units in Delhi-NCR market, he said it would take 18 quarters to liquidate these stocks considering the current sales velocity. Zia said there is a “complete chaos” in the Delhi-NCR property market after the real estate law came into force from May this year as Uttar Pradesh and Haryana governments are yet to implement this law.
On outlook, he said the NCR property market will take some time to settle down and make adjustment following the government’s initiatives like demonetisation, real estate law and GST.