Great inactiveness in India’s real estate sector still prolong with the new construction project turning down very deeply in the three biggest realty markets in the third quarter of this year, according to the Consultancy firm Cushman and Wakefiled said in an unreleased report.
New launches shown a wide down by 54 per cent in the national capital region, 11 per cent in Mumbai and 27 per cent in Bangalore during July-September 2014 quarter, the country has seen a fall of 21 per cent in the new projects, the drop was steeper, in fact, more than 50 per-cent, in an affordable housing segment.
On another side, the smaller markets such as Hyderabad, Kolkata, Chennai and Pune has shown a positive face with a good increase in new launches.
Realty sector experts come up with number of reasons for the decline in the new construction projects, there is actually oversupply in most of the cities due to weak market and lower growth rate in sale due to which new launched remained in trouble., said by Shveta Jain, executive director, residential services, India, also she added, capital value in most cities remained stable except cities like Pune and Bangalore.
Also, because of the unavailability of land due to the tough land acquisition law which is a major reason behind the decline in the property, added by Getamber Anand, president of Credai, part of the Real Estate Developers. Also, the government has not auctioned any land in the recent years because unavailability of land, also pointed out.
With unsold inventory it is not possible to grow the prices while launching new projects at old prices, said by Manoj Gaur, MD of realty major Gaursons. Therefore, many developers are waiting for the price to escalate to unleash new offering. , also it is expected that by March 2015 most of the old properties will be sold.
The Cushman and Wakefiled report said, the 3rd quarter saw the new launches of around 33,800 housing units in top 8 cities, with Chennai recorded highest 45 projects with Ahemdabad with the lowest number, five, in the same period last year, with 41,700 apartments.
The deepest decline was recorded in the affordable segment by 52 per cent in Q3 2014, Developer said, the margin in the affordable housing segment was very minor, and not possible to climb-up the construction cost to the customers. So, planning into an affordable housing segment is not profit-making at the present moment, though the demand is still high in this particular segment.
