Despite the slowdown affecting sales, real estate developers are in a wait-and-watch mode rather than reducing prices to ease their inventory.
Explaining the policy, National Real Estate Development Council chairman and Raheja Developers CMD Navin Raheja told FE, ?The input prices of cement, steel rods, bricks and other materials have seen an increase of 20-30% in the last two to three months, which is impacting the margins of developers. So we are constrained in reducing prices.?
Jones Lang LaSalle India chairman and country head Anuj Puri also agrees. ?The price corrections that were anticipated in the primary cities have not materialised, at least, not in the magnitude hoped for. That means that the developers are not in a position to reduce prices. They are now expecting some sales to happen in the remaining one month of the current calendar year.?
According to an analysis by Cushman & Wakefield?s and the annual report by Global Real Estate Institute, there will be a demand of 2.3 million residential units in the next five years, while the estimated supply during the period is expected to be approximately one million units.
India is expected to see a demand of 3.94 million housing units, growing at a steady pace of 11% CAGR. Of this, 2.3 million units are expected from the top seven cities alone, where the shortfall is estimated to be around 130%. The NCR is also expected to witness the highest supply of residential units, albeit, much lower than the demand, followed closely by Mumbai.