Sale of home spaces increase by 7%

According to a report by property research firm Liases Foras, during the quarter to December 2015, sale of homes across the top eight cities of India improved by 7% year-on-year. Sales increased by 15% on a quarter on-quarter basis on the back of sluggish pricing and discounts by builders during the same period.

As per the report, an aggregate of 78 million sq ft of home space was purchased across the eight cities compared with 72.9 million sq ft a year ago.

Pankaj Kapoor, managing director of Liases Foras says, “It is a buyers’ market today. Geographies, which were predominantly investor driven, are still suffering while areas which were inhabited and more suited to end-users are seeing improvement in sales. Now the gap between affordability and pricing is reducing.”

While the purchase of home space has increased, the unsold stock has also shown an increasing trend showing 21% y-o-y and 5% q-o-q to 1,124.9 million sq ft. Unsold inventory in Mumbai rose 28% to 235.9 million sq ft while NCR rose to 361.1million sq ft, up 14% over last year.

The top cities have witnessed a decline in the total new launches with a decrease of 11% in q-o-q to 67.1 million sq ft., with NCR witnessing 61% decline in new launches during the quarter. Out of the total launches 52% of the new launches are in the price range of Rs.25-50 lakh. The number of new launches in the affordable category of under Rs.25 lakh has increased by 50% from the previous quarter.

Noting this Manoj Gaur, president, Confederation of Real Estate Developers Association of India (CREDAI), NCR, and managing director of Gaursons India, a real estate developer said, “Pricing has stagnated and inventory overhang is reducing because of lower number of new launches. Prices are close to the bottom, so end users are finding value.” To clear their unsold stock, many builders offered significant discounts during the festive period in 2015. Out of the total sales across the top eight cities, 31% of sales were in the price range of Rs.50 lakh to Rs.1 crore and about 30% of sales were in the price range of Rs 25-50 lakh.