Home Prices in NCR to Slightly Drop: Experts
"All of it really depends on how much focussed a builder is upon moving out the inventory"
With the real estate sector facing a slump across the NCR, experts say there is an urgent need for correction in property prices.
In fact, according to them, a slight drop in property rates could be expected in the next few months. But, all of it really depends on how much focussed a builder is upon moving out the inventory. The real estate sector has been affected by declining sales due to high prices and low demand. Currently, NCR builders could be having anything between 35 and 45% of apartments in cold storage, with Noida alone accounting for as many as 40,000 unsold units.
Experts say the sale of property in NCR has been at an all-time low in the last three years. "Huge inventories have been stacked up by builders and it will be wise for them to move their stock to keep their business rolling and meet existing commitments. The logjam will never end unless there is a price correction, but it all depends whether the builder has the bandwidth for it," said Ganesh Vasudevan, CEO of IndiaProperty.com, a real estate portal.
"Some 40,000 units are ready but remaining unsold in Noida, despite discounts and other benefits offered by developers. The next few months will determine how the market is moving, following the Okhla eco-sensitive zone demarcation," said Surabhi Arora, associate director (research) at Colliers International India, a realty consultant firm.
However, NCR builders say they are loaded with pending dues for leasing charges of existing land. With low demand and construction and input cost on a steady rise, the chances of rate cuts are bleak.
"While there is a huge inventory to move, the builders do not have the bandwidth to cut down rates at this time. The builders are already over stretched and there are huge costs piled upon most of them. While there is a need to move inventory, correcting rates is not something that is out there to happen immediately. Builders will wait and watch a bit," a senior member of Credai western UP, a developers' organization, said.
But experts say there is no other option than price correction.
He added, "The price trend in Noida has shot up from Rs 2,800 per sq ft in 2014 to Rs 3,500 per sq ft in Noida on an average. There has to be a correction, for the buyers to show slightest interest in a bleak demand situation."
Source: ET Realty
Source: ET Realty
1 comments:
Write commentsIn the aftermath of the Sub Prime crisis and the sinking real estate segment in the UP nations, NRIs have been looking homewards for investing in real estate in past couple of years. Additionally the depreciation of the rupee in the last year has further fuelled the demand for real investment by NRIs in India.
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