Unsold flats reduce in NCR as relators keep away from new projects, says report

An increase in sale of residential units and a conscious decision by developers to regulate new projects has led to a 16% decline in unsold housing stock between July 2021 and July 2022 in the National Capital Region (NCR), a report by Anarock, a private consultancy, has said.

The balanced supply and demand has helped in reducing the inventory overhang in NCR from 80 months to 27 months, which is lowest in quite some time and indicates a favourable residential realty market, said the report.

City based developers and consultants concurred with the findings and said developers have kept new launches on hold and instead preferred to sell the existing stock, which had helped in reducing inventory.

But the next few months will see more new launches as they feel confident about the demand, the experts added.

“NCR saw its unsold stock decline by 16% on yearly basis – from approximately 1,68,710 units in Q2 (second quarter) 2021-end to approximately 1,41,240 units as of Q2 2022-end,” said Prashant Thakur, senior director and head, research, Anarock Group.

Gurugram saw the highest sale of residential units across Delhi-NCR in the first six months but the decline in quarterly sale from quarter one to quarter two was 14%. The city witnessed sale of 8,850 units in the first quarter of 2022, while it saw sale of 7,580 units in second quarter, the report said.

Noida and Greater Noida also saw a decline in sales by 19% and 20%, respectively, the report said. Noida saw sale of 2,045 units in first quarter while it sold only 1,650 units in the second quarter. The sale in Greater Noida fell from 3,450 units in first quarter to 2,750 units in second quarter, the report said.

“Both Gurugram and Noida markets have stable sentiments and robust economic drivers. With a calibrated approach towards supply, these markets are expected to sustain consistent traction from buyers,” said Ashutosh Kashyap, director, advisory services, Colliers India

The decrease in sale is being attributed to restricted supply, lack of ready-to-move-in units, increase in home loan interest rate and the end of discounts and rebates offered last year by developers to sell their unsold stock.

“Residential real estate demand/sales will be impacted by several factors. Besides rising interest rates and increase in prices, withdrawals of incentives such as stamp duty rebate will also play out in the coming months,” said Vinod Behl, a city based real estate expert.

The developers said the appreciation in property prices in the past year and half has also impacted sales. “The sales volume has declined because of appreciation of prices by 1.5 to 2 times in the past one and half years,” said Nayan Raheja of Raheja Group.

The report also said that Gururgam has the maximum unsold stock of 59,120 units, which declined by 7% quarterly. The city also saw a steep decline in new supply of residential units from 7,890 units in first quarter to 2,830 units in second quarter.

Kamaljeet Singh, vice-president, Bestech, said sales are robust and a slight blip was seen in the second quarter. “The reason is that ready-to-move-in stock is exhausted. The next few months will witness launch of new projects but the end-user prefers finished units, which may hold up sales,” he said.

The developers want the government to ensure faster clearances and rebate in GST along with checks on rising raw material cost. “The real estate industry should get rebate on GST on lines of infrastructure sector. Single window clearances of projects will also improve matters,” said Pradeep Agarwal, managing director, Signature Developers.

A survey report released by CREDAI NCR, a lobbying body of developers, on Wednesday said 83% developers, from among the 120 they surveyed in NCR in the last two weeks, plan to launch new projects in next six months.

Developers said increase in lending rate has not dented the market with 68 developers seeing no decrease in queries. Also, 35% developers said delay in approvals was a major handicap for them.