Developers have difficulty to sell luxury flats, decide to put new launches on hold

Q: What are the problems developer are facing these days?

Ravindra Singh,

27th April 2015

Real estate News in Mumbai

real estate mumbai

real estate news

luxury apartments

real estate developers

drop in realty launches

weak demand in realty market

real estate in south mumbai

residential launches in eight major cities

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Replies (2)

Hi Everybody,
Most of the developer accepted that real estate sales have been affected by weak market sentiment driving buyers to keep their purchases continue. On the other hand, professionals stated that too-high prices are a main obstruction for buyers who may want to buy luxury apartments.

Sunil Joshi, Mumbai

27th April 2015

Comment

They have to accept Sunit. Reason, buyers are smarter.
In a effort to clear stocks, builders are now looking at new ways to appeal to customers, including offers of discounts. As per real estate research firm CBRE, residential sales across all sectors fell by about 30% in 2014 across major cities, with the Delhi area seeing the most significant drop. New launches in these cities also dropped by about 25% in 2014 over the past year.

Miraniyatin, Mumbai

27th April 2015

Well said Mirani,
Customers are looking for completed projects instead of those under construction because they are careful when it comes to buying luxury houses. Another reason was, customer was more intelligent, Today, customers are more intelligent. They do not mind giving a little premium and buying a completed apartment. Therefore, one of the difficulties luxury builders has to face is that there should be enough cash flow to complete the projects.

Sunil Joshi, Mumbai

27th April 2015

Hi Ravindra,
Real estate developers are taking longer to sell luxury apartments, and are stopping on launching new projects in the portion due to poor demand in a reserved property market. Even though developers refused facing any huge inventory pile-up, most of them accepted that property sales have been affected by weak market sentiment pushing buyers to keep their purchases.

Varun,

27th April 2015

Comment

Right Varun,
It totally depends on the location, it generally takes between 2 to 4 yrs. to implement a project and the builder sells the homes through this period. But in south Mumbai, where most of the city's luxury and high-end apartment projects are located, the inventory period has risen from 40 months to about 70 months.

Rajatrawal, Mumbai

27th April 2015

@Rajat,
On the other hand, the last year saw the percentage of launches in the premium section drop to about 6% as most builders tried to sell projects that had already been launched. As per the report . residential launches in 8 major cities dropped by 50% at 24700 units in the first quarter of 2015 over the same period last year as most developers are concentrating on completing existing projects.

Varun,

27th April 2015

Hmm,
The demand for luxury apartments is especially weak. Even though some of the projects are doing well, there is also a large stock of housing units which are lying unsold, especially in the premium section.

Rajatrawal, Mumbai

27th April 2015