NCR has witnessed a 3-5 per cent decrease in average per-sq- ft property prices over
the last one year (Q4 2016 to Q3 2017). See chart below:
Currently, NCR has the maximum number of unsold units among all the top cities in
India. An approximate 2 lakh unsold units are stocked up across different cities in the
region. Greater Noida has maximum share of unsold inventory, followed by
There are many reasons for the price decrease in NCR. To begin with, excessive delay
in project construction and possession has hurt buyers’ sentiments and led to subdued
demand. Also, many projects have been stalled due to agitations and litigation issues.
The massive unsold inventory itself has acted as a sentiment suppressant – and finally,
while demonetization, RERA and GST are potentially positive moves for the industry,
they have played a significant role in reduced buyer sentiment, contributing to the
Prices are likely to remain stagnant for a few more quarters. Factors such as the huge
unsold inventory, recent cases of developers’ bankruptcy or insolvency and the huge
number of stalled projects have made buyers skeptical about the market. Also, delay
in execution and dilution of RERA have acted as dampeners for buyers’ confidence.
Prices are unlikely to rise near term.
In South India, Hyderabad, Chennai and Bengaluru show the fastest recovery.
By contrast, the unsold residential property inventory has declined rapidly in South
India as compared to other parts of the country. ANAROCK's Q3 2017 research
findings indicated that unsold inventory declined by 21 per cent, 20 per cent and 15
per cent in Hyderabad, Chennai and Bengaluru respectively from 2016 year-end
With an overall unsold inventory decline of only 8 per cent in the top seven cities,
South Indian cities have surely bucked the trend. While 2017 YTD supply was down
by 59 per cent across the top seven cities when compared to 2016 additions, these
South India cities registered an average decline of 75 per cent.
One of the key reasons for this decline was the restricted supply of fresh projects in
these cities. The fine equilibrium that developers have achieved in terms of restricting
new launches and focusing on clearing unsold stock in the predominantly end-user
driven markets has been a defining factor in South India. With fundamental growth
drivers intact and rising demand for office spaces, these cities are likely to make a
faster come-back in the residential segment as well, when compared to their
counterparts in the West, North and East India.
About the Author:
Anuj Puri is Chairman at ANAROCK Property Consultants.