Developers are finding it difficult to hold on the story that the real estate sector is recovering, especially in the National Capital Region (NCR). While on an average, sales have increased marginally in eight metro cities, they have dropped significantly in NCR. According to the Residential Real Estate Market Report for July-September quarter 2018-19 by Liases Foras, a Mumbai-based real estate rating and research firm, “During the quarter, residential real estate sale increased by 1% as compared to the last quarter in eight cities. However, NCR and Pune have recorded a quarter-on-quarter (q-o-q) drop of 12% and 1% in sales, respectively, in the same quarter."

The report covers NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Chennai, Hyderabad, Pune, Ahmedabad and Kolkata.

The report also indicates a drop of 16% in the number of new project launches during the quarter ending September 2018 compared to the previous quarter (June 2018). However, despite drop in project launches, the inventory of unsold residential units has increased. “Unsold stock increased by 1% on a year-on-year (y-o-y) basis and on q-o-q basis the unsold stock has grown marginally," said the Liases Foras report. Kolkata witnessed the highest increase of 28% y-o-y in unsold stock, followed by Hyderabad and Chennai showing 25% and 15% y-o-y growth, respectively. On the other hand, Hyderabad and Chennai recorded maximum q-o-q increase—that of 5% between Q1 2018-19 and Q2 2018-19 in the unsold stock.

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The good news for potential home buyers is that prices either remained stagnant or dropped during the quarter in the cities mentioned earlier. As per the Liases Foras report, “Weighted average prices across all tier-I cities remained stagnant on an annual basis and witnessed a dip of 1% on quarterly basis."

Another report by Anarock Property consultant, a real estate consultancy firm, for the September 2018 quarter also paints a grim picture for the NCR market. While the report said sales have improved in seven metros, including NCR, it is sceptical about the latter’s residential market. “The realty market of Delhi-NCR has been one of the worst-affected in the country amongst other prominent cities post the slowdown due to reformatory changes including DeMo, RERA and GST. While other cities including Bengaluru and MMR have gained significant momentum with the dust of these policies finally settling in, Delhi-NCR is yet to come anywhere close to its peak levels," said the report.

Read: How much a house costs in Mumbai

Besides these reasons, there are various other factors that have contributed to the slowdown of real estate, especially in NCR. As per the Anarock report, other factors are “cash crunch resulting from developers siphoning off funds for other projects (or even other purposes), ‘Tweaked’ project details to bypass environmental/regulatory clearance norms, constantly changing regulations, the water and sand crisis, and bureaucratic quagmire encountered in project clearances."

A large number of projects, at various stages of construction in the NCR residential real estate market, are stuck in court cases. “Out of the total 200,000 units stuck in various stages of (non) completion in entire NCR since their launch in 2013 or before, as many as 130,000 units belong to Noida and Greater Noida combined—a massive 65% of the entire stuck inventory in NCR," said the Anarock report.

If you are looking to buy a house for end use, this could be the right time to get good bargains, but do your due diligence before you seal the deal.

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