08 November 23
HOUSE WARMING With sales outpacing supply, unsold inventory has also hit a decadal low.
New Delhi: Real estate developers are avoiding festive offers this sea- son due to the rapid oversubscription and quick sales of projects, unlike in the past when home purchases included various incentives like TVs AC units, cars, and even foreign trips, said top real estate executives.
“Builders used to offer incentives when there was an oversupply but weak demand. In the past 18 months, the majority of unsold inventory has been sold, resulting in Increased demand for newly launched projects, “said Manojgaur, chairman of CREDAI National and CMD of gaurs group.
According to industry reports, residential sales in India are projected to achieve a record high in 2023, as developers anticipate selling more than 500,000 housing units by the year’s end.
According to data analytics firm Prop Equity Data, in 2022, developers in the top seven cities sold 464,849 units. In the first nine months of this year, they have already sold 372,961 units.
“The buyers now seek assurance of securing a flat rather than discounts. Developers are receiving 4,000 checks for 800 flats, indicaing that demand is surpassing supply,” said Harsh V Bansal, convenor of the CII Delhi sub-commit- tee on real estate.
Despite the steady influx of new property launches, the industry is poised to experience a surge in demand that will be the highest in a decade.
“In the southern and western regions of the country, including markets such as Pune, Mumbai, Bengaluru, and Hyderabad, the situation is comparable, with a similar positive response. The encouraging aspect is that reputable developers are introducing projects that appeal to both homebuyers and investors,” explained Vishal Raheja, MD at InvestoXpert.com, a real estate brokerage firm.
With sales outpacing supply, the number of unsold inventory has also reached a decadal low.
Unsold housing stocks in Tier-1 cities in India dropped 11% to 508,464 units in Q3 2023 from 5,26,497 units in Q3 2022.
Analysis of the first three quarters reveals that new property launches in Tier-1 cities remain consistent with 2022 levels.
“The sector is getting the benefit of policy intervention and there is a lot more trust in developers. Whi- le two years ago, the majority of buyers were looking for ready-to- move-in flats, the trend has reversed,” said Sachin Arora, corporate director, Investors Clinic, a real estate consultancy.
In the Delhi-NCR region, unsold stock dropped by 7% in the third quarter of 2023 as compared to Q2 2023, while residential property sales continued the upward momentum gained after the pandemic.
“Certain micromarkets in the country have received tremendous responses from buyers, and prices have increased by 30-40% here. This attracts a lot of interest from individual investors as well,” said Sachin Gawri, founder and CEO of Rise Infraventures.
Source-The Economic Times