Residential real estate scenario

Q: Hi!1 I want to know how is the scenario of residential real estate market in top five cities.

Diwakar Shetty,

18th September 2013

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Among the top five cities which city have seen a bad year in the real estate sector.

Diwakar Shetty,

18th September 2013

Comment

Among all the cities which have seen a bad year in the real estate sector, Mumbai is the worst hit. In Mumbai, the inventory would be sold within seven to eight months in the year 2007. However, now it is taking up to 30 months to be sold. Most developers are in deep debts and are trying hard to avoid loan defaults. Private equity investors are struggling hard to exit the sector. With the current economic situation, it will be a while before the real estate sector sees the light of the day.

Amreesh Murugan,

18th September 2013

Is there any chance for price correction?

Abhishek,

18th September 2013

Comment

The falling sales in metros and increasing inventory pile up is leading to a price correction phase according to real estate consultancy Liases Foras. According to the firm, focus has shifted towards end users than investors. The plots bought with the intent of investment by people are coming back to the market at discounted rates. For example, the prices have declined by about 20% in Gurgaon and about 15% in Faridabad in secondary markets. Mumbai and Delhi are seeing price corrections in high-end residential segment

Santosh TR,

18th September 2013

Hey Manohar, What is the reason for less demand and high supply?

Diwakar Shetty,

18th September 2013

Comment

Demand has fallen and projects are stalled in big cities with private equity investors trying to exit the industry. The rupee value has fallen and there is a weak economic sentiment in the country. The real estate sector is seeing a dark cloud hovering over it in the current scenario.

Manohar,

18th September 2013

The country saw reduced sales in the second quarter this year compared to the first quarter in five key cities viz. Mumbai, Delhi-National Capital Region (NCR), Hyderabad, Pune and Chennai. The second quarter saw a drop of 12% in Mumbai, 13% in NCR, 15% in Pune and 7% in Chennai in property sales.

Amreesh Murugan,

18th September 2013

The year 2013 has seen a stark contrast where the residential real estate scenario is quite opposite. While there is a good supply of property but there are hardly any takers for them. Developers are sitting on piled up inventory and deep debts. The inventory pile up of unsold houses has reached about 670 million sq.ft.

Manohar,

18th September 2013

Comment