Even as discounts, schemes and price cuts continue to rain in Indian real estate segment, the sale of houses seems not ready to pick any time soon. In fact, the sale in residential real estate is at decadal low, as per a Knight Frank India report.
The Indian real estate has been undergoing a slump for the past two years. The multiple effects of demonetization, GST regulation and RERA implementation have disrupted the segment to a great extent. Lately NBFC crisis had added to the woes and the year 2020 was predicted by many experts as the year of revival for residential realty. COVID-19 pandemic and the ensuing nationwide lockdown since March 2020 has proved to be the final nail in the coffin for the sector that was already grappling with slowing sales and rising unsold inventory levels since the past few years.
As per the report, the sale of residential units during H1 2020 across top eight cities has dropped by 54 per cent to a decadal low of 59,538 units as compared to 129,285 units in the year ago period. The new launches have dropped by 46 per cent to 60,489 units.
“NCR, Chennai and Hyderabad had near zero sales during this period, while developers were forced to postpone launches across markets due to labor unavailability and the well anticipated drop in demand,” Business Standard quoted Knight Frank report.
Talking city wise, Delhi NCR seems to be the worst hit with a y-o-y fall of 73% in the number of units sold at just 5,446. NCR is followed by Ahmedabad which registered a decline of 69% y-o-y in the number of units sold at 2,520 and Chennai suffering a decline of 67% y-o-y at 2,981 units. Mumbai, the most expensive real estate market in the country, saw a declining 45% in housing sales to 18,646 units.
Being aware of the bleak market situation, developers are offering a slew of schemes and offers like never before. Despite that and a drop in mortgage rates, the discounts are not cutting much ice with the buyers who are still not ready to make any big purchases due to which sales continue to fall.
The supply side in the residential sector is also badly hit. The launches in the residential real estate sector have also been the worst in a decade, with the numbers falling 46% y-o-y to 60,489 units in the January-June 2020 period. The unsold inventory during the period stood at 4.46 lakh units in the top eight cities at about the same levels as last year.