Delhi NCR flat sales during July-Dec drop by 43% but prices go up

Delhi/NCR
The residential real estate market in the National Capital Region (NCR) slumped to its worst performance in a decade, with sales plunging 43% in July-December 2014 compared with the same period the previous year, according to a report prepared by consultancy firm Knight Frank India.

However, while sales volumes were down to only 40,575 units in the second half of 2014 as against 71,421 in the corresponding period in 2013, prices rose by 3% on an average. With sales down, the number of launches in NCR - the country's biggest real estate market—during the second half of 2014 declined by 24% to 73,143 units against 95,768 units in the same period of 2013.

Other key markets in the country like Mumbai and Bengaluru performed much better compared to NCR. In Mumbai, sales volume fell by 9% to 67,715 units. In Bengaluru, sales were down only 3% at 55,701 units.

But even in these cities, the number of launches declined sharply. In Mumbai, launches were down 43% during the period, while in Bengaluru, it was down 13%.

Overall, the sales volume in the top six cities—NCR, Mumbai, Bengaluru, Pune, Chennai and Hyderabad declined by 17% to 2,34,930 units in the second half of 2014 and new launches by 28% to 2,68,950 units.

But the Knight Frank report was optimistic of a turnaround in the first half of 2015. It predicted a 4% increase in the overall sales of residential units in six cities in Jan-June 2015, compared with the same period last year.

However, it will be a while before new launches pick up. It predicted a 4% decline during the first half of 2015 against the same period in 2014 because of the large unsold inventory.

Prices, the report said, will rise in the first half of this year. Mumbai is likely to witness the sharpest rise at 10%, followed by Bengaluru at 3% and NCR at 2%. How the sector performs will depend a lot on the announcements in the Union budget, Shishir Baijal, chairman and managing director of Knight Frank India, said. "2014 has not been a great year for Indian real estate as stated in our latest ... report, jointly developed with Ficci."

However, he added: "We expect 2015 to be the year of recovery and stabilization. The current economic indicators look positive, though the real impact will only be felt by the second half of this year. A surprise rate cut by RBI has marked the beginning of the new year and going forward, the Make in India campaign, REITs, FDI relaxation and smart cities, among others, augurs well for giving the much-needed boost to stakeholder sentiments."

The good news is that commercial real estate demand picked up substantially in the second half of 2014.

Source:http://content.magicbricks.com/industry-news/delhi-ncr-real-estate-news/delhi-ncr-flat-sales-during-july-dec-drop-by-43-but-prices-go-up/80199.html