-- Current unsold inventory levels, at over 7 lakh units, would take three years to exhaust
-- Residential market will not see a recovery in the next six months
-- Residential market sees sharp drop in price growth falling from 9 per cent to 2 per cent in last three years
India’s residential real estate sector is in the grips of a slowdown with the current unsold inventory in the top eight cities at 7 lakh units. This would take three years to exhaust, and there has been a drop of nearly 20 per cent in sales in the January-June 2015 period, according to a half-yearly report by Knight Frank India, a real estate consultancy.
The report tracked the residential market across eight metros including Mumbai, National Capital Region (NCR), Kolkata, Chennai, Hyderabad, Bengaluru, Ahmedabad and Pune.
“Despite economic scenario strengthening, we are seeing no improvement in the residential market across the top eight cities,” Shishir Baijal, Chairman & Managing Director, Knight Frank India, said in a statement. “While sales dropped by nearly 20 per cent during January-June 2015 compared to the same period last year, new residential units coming into the market fell by 45 per cent. Going forward, we do not see any improvement until the end of 2015 in terms of sales.”
Mumbai records dismal performance Meanwhile, Mumbai recorded a poor performance with the first-half of the calendar 2015 seeing a 47 per cent drop in new launches. Amid sliding sales, the city had nearly 2 lakh unsold homes.
Mumbai’s residential market is still reeling under tremendous pressure with drastic drop in new launches at the back of falling demand, the report said.
“The recovery in the residential market does not seem imminent until 2016, and we expect sales to be in the range of 63,000 units, which is marginally below the 2014 levels,” said Samantak Das, Chief Economist & National director – Research, Knight Frank India.
Over the last two years, demand in Mumbai dipped 30 per cent and launches have fallen by 70 per cent.
“Residential market will start turning when the economic reforms become reality, job creations start happening as a result of focus on manufacturing and infrastructure and developers start delivering projects on time thus infusing confidence among consumers,” said Mr. Das.
