Housing launches within key markets drop by 59 per cent
After plenty of setbacks relating to delivery and an enormous pile-up of inventory, the numbers for housing launches seem bleak, too, hence firmly establishing the gloom story of the real estate industry. Till the month of July of this year, launches dropped by 38 to 59 per cent across key markets such as Gurgaon, Pune, Navi Mumbai, Kolkata and Noida; in comparison with the same period of the last fiscal. The only exception to this overall downtrend is the city of Bangalore which has been reporting a rise within launches.
Noida:
With only 5,994 units launched till this fiscal’s July, which is down from 14,797 within the same period of 2012, Noida witnessed the highest drop at 59.5 per cent.
Gurgaon:
From 19,310 till July of 2012, the number of launches plunged to 11,955 about 38 per cent within the corresponding period.
Other cities:
Similarly, launches in Navi Mumbai were down by 40.3 per cent, Pune witnessed a drop of 46.6 per cent while 41.6 per cent was witnessed by Kolkata. Pan India, the overall launches within the 15 major cities were down by 15.8 per cent with 188,145 units within all segments till this fiscal’s July.
Reason for decline:
Few realty experts believe that the present situation is not an alarming one, as it is very difficult for realty developers to dispose their inventory with the current economic slowdown looming over every one.
The number of new launches is directly proportionate to demand. With the bulk of potential property buyers falling under the wait-and-watch category new launches have seen a sharp drop. This has in-turn led to an oversupply situation with very low sales.
Further, realty buyers are less enthusiastic due to the absence of any significant increase within the prices since the past six months.
Because of the delays in deliveries, builders have lost and continue to lose their credibility and goodwill.
Measures being taken:
Numerous developers have been deferring launches in order to manage the mismatch between demand and supply.
However, the new supply of inventory is being controlled at a rationalized price, which in turn is enabling the developers to offload their existing inventories without directly offering price cuts.
Presently, with the festive season around the corner developers have been and are still experimenting with various schemes and offers to boost sales.
Conclusion:
Delay in delivery is already a worrying issue for both the buyers and the industry. A supply of only 143,838 of the committed 406,539 housing units has been completed till July of this year.
According to experts, the delays are a result of the industry’s liquidity crunch as well as the fact that few developers have committed more than their present execution capabilities. However, with the festive season stimulating the sales and generating cash flows for developers, the market is expected to bounce back by the third quarter next year.
