Home prices dip on tighter liquidity
Metro home prices take a dip on tighter liquidity
The vision of owning a house is slowly getting clearer for buyers as residential real estate prices are beginning to see the promised correction on the back of hardening interest rates and poor transaction volumes.
Real estate services firm Jones Lang LaSalle India (JLL) says newly-launched residential projects are recording an average 15% lower prices, especially in Delhi and Mumbai ? markets witnessing oversupply in many pockets.
The higher the prices, more the correction, with Gurgaon, Greater Noida, Navi Mumbai and Bangalore as prime examples, where prices jumped 30-35% last year.
Sample this: As per data provided by 99 Acres, per sq ft capital value in Gurgaon is down from Rs. 4,268 in September to Rs. 3,538 this quarter?a whopping 17% decline. Similarly, in Kaushambi, the capital value has decreased by around 11%. Greater Noida has also witnessed a dip, though marginal as of now.
Mumbai's real estate market is showing similar signs. Areas including Parel, Juhu and Goregaon have seen price correction this quarter, with rental rates also softening across the board, with some in outskirts like Powai registering a drop of even 24%.
Bangalore's Electronic City has witnessed per square feet capital value dip by around 3%, while it is down by 12% in RT Nagar.
With sales volumes of residential units for the first two months of this year down by at least 40%, developers are resorting to discounts to lure customers in other top markets where the dip is not reflected in per square feet prices.
“There are dozens of examples in Mumbai and Delhi and even Bangalore where new projects are being sold at a lower price. Maybe sales will pick up after salary hikes in April,” says Abhishek Kiran Gupta, head (research), Jones Lang LaSalle India.
“It’s only ready-to-move-in flats that are selling right now. We will see some more major price correction in the next month or so,” predicts Vineet Singh, business head, 99 Acres. Navin Raheja, MD, Raheja Developers, agrees that move-in flats have higher occupancy, even as high as 80%.
“Many developers are forced to sell plots or unfinished home units following tightened liquidity by banks,” points out Sam Chopra, director, Re/Max, an organisation of real estate brokers.
CMD of Omaxe, Rohtas Goel, however, adds: “Projects with a fast pace of construction, good locations and those nearing possession are witnessing appreciation.”
As for demand, a senior Ansal API official is hopeful that with the economy looking strong and impending salary hikes, the demand will only be stimulated.
http://www.financialexpress.com/news/metro-home-prices-take-a-dip-on-tighter-liquidity/758216/0#