Home Prices Will Show No Spunk in Delhi/NCR

Home prices in Delhi-NCR are likely to remain flat in calendar year 2020 even though leading developers in the region are hopeful that the recent government measures will help revive sales. “Developers are keen to get the sales volume back in the market rather than hiking the price,” said Samantak Das, chief economist and head of research at property consultant JLL India.

Property prices in the National Capital Region increased a marginal 2% per square feet on an average this calendar year even as new launches declined 18% to 14,409 housing units from 17,660 in 2018 as developers realigned their strategies to meet the changing consumer demand and focused on clearing their unsold inventory, a JLL report said.

Anarock Property Consultants said the number of houses sold in Delhi-NCR increased 6% in 2019 at 46,920 units against 44,300 units last year. “The unrelenting liquidity crisis, lower-than-expected buyer sentiment and faltering GDP growth eventually put brakes on the overall housing growth in the second half of 2019,” said Anuj Puri, chairman at Anarock. While the government and the Reserve Bank of India announced various measures to revive the housing sector, developers said 2019 was a tough year.

“The sluggish economic growth during the first two-quarters of the current fiscal added to the misery of the sector,” said Manoj Gaur, managing director at Gaurs Group. “As a result, both sales, as well as launches, fell during the year.” Developers in the region are now hopeful that the government measures will help boost sales in 2020. “A lot of announcements were made, and we hope that in the coming year at least some of them will come to fruition,” said Pradeep Aggarwal, chairman of real estate developer Signature Global.

Nayan Raheja, executive director at Raheja Group, said the Indian real estate industry is poised for a revival. “With the newly introduced AIF (alternate investment fund), proposed threshold introduction in the IBC/NCLT laws, (and) policy frameworks for new product typologies like affordable residential plots and commercial plots, India looks poised to be on its way to finally breaking the gridlock of stuck projects and move towards a healthy real estate cycle,” he said.

At the national level, supply of residential property increased 24% year on year in the first nine months of 2019, according to commercial real estate service firm CBRE. “Sales activity too improved by 26% during the same period,” said Anshuman Magazine, CEO, India, South East Asia, Middle East and Africa, at CBRE. “While the NBFC crisis and the resulting economic slowdown have slowed the recovery of the sector, affordable housing continues to drive the sector,” he said. The JLL report pointed out that annual sales have exceeded annual launches for the first time since 2016, indicating further stability in the residential market.

(Source: Economictimes)