According to him three years of 5-6 percent growth and the situation could be repeated second, the rise of the professional real-estate investor. The last 10 years have seen a growing number of middle class Indians trying their hand at the property market. Their speculative behaviour is not unlike that of middle class Americans who during the go-go years bought houses only to flip them a couple of years later for a 15-20 percent gain. That came crashing down in early 2008 and the rest of the story is well known. It is only now that India circa 2013 is no different. Dinner parties are filled with casual conversations on which apartment or piece of land to invest in. There’s this sweeping confidence in real-estate giving a 20-25 percent return every year. According to Sanjay Dutt, chief executive at Cushman and Wakefield, if a developer sells 2,000 flats and 70 percent of those are to people who plan to put them on the market in a couple of years, those shouldn’t be counted as sales. This leads to a situation in large metros where houses in under-construction projects are available anywhere between Rs 1,000-1,500 less than what the builder is selling them for. Those who want to sell houses are willing to take a small haircut. What happens when this becomes too acute is not too hard to see. The market would correct.
Lastly, according to the Ministry of Housing and Urban Poverty Alleviation, 11.09 million homes in urban areas are lying empty. Sellers are holding out in the hope that capital values continue to appreciate while buyers find the prices too steep. When that stock comes on Gift City Latest Update this could also portend a correction. A severe fall in sales has resulted in a huge inventory pile up with real-estate developers. According to a report released on 28 January by property consultant, Knight Frank India, the National Capital Region (NCR) has 192,568 unsold residential units which will take approximately 14 quarters to sell (QTS); it means that if no further units are added, the current inventory will take 14 quarters to get sold.
QTS is a ratio calculated on the basis of average sales for the last eight quarters divided by the outstanding units on sale. Mumbai has approximately 12 quarters of inventory, followed by Hyderabad with close to eight quarters and Pune, Chennai and Bengaluru with seven quarters each. Ideally QTS ratio in a healthy market should be around six quarters, said Shishir Baijal, chairman and managing director, Knight Frank India.
Such inventory pile up is the result of poor Gift City News despite a slowdown in the number of projects launched. According to the report, residential launches and sales were at a three-year low during the December quarter across the six tier-I cities. Project launches fell by 22% to 126,233 units in the second half (H2) of 2014 from 161,926 during the same period a year ago. The numbers are worse for the year compared with the half yearly figures. Sales were down about 17 % from 284,550 units in 2013 to 234,930 in 2014. Similarly new launches dropped by around 28% from 372,160 units in 2013 to 268,950 units in 2014.
A report from another real-estate consultancy, CBRE South Asia Pvt. Ltd, confirms this trend. It shows a residential sales decline of about 30% year on year ending 2014 and new supply additions decline of about 25% over the same period according to the Knight Frank report, new launches have fallen by 43% in Mumbai, followed by Hyderabad that saw a 30% drop. NCR saw a decrease of 24% in the number of project launches in 2014 compared with 2013, Bangalore 13%, Pune 26% and Chennai 25%. When it comes to sales, NCR witnessed the sharpest fall in sales volume among all the six cities. Property sales fell by 43% in NCR in 2014, followed by Hyderabad with 18%. Sales in Pune and Chennai declined