Home sales in top 6 cities slip 8% in Dec quarter, but prices continue to rise
Home sales fell 8 per cent across the top six cities of the country in the quarter to December, according to property research firm Liases Foras, indicating sustained sluggishness in the property market. This, however, did not prevent prices from rising. Average prices rose 7 per cent in these cities during the period.
Total unsold inventory across the six cities stood at 832.09 million square feet, or 39 month’s level against 31 month’s a year ago, Liases Foras said.
Of the six markets, Chennai was the worst affected with a 48 per cent on-year plunge in sales, while Bengaluru and the National Capital Region (NCR) saw sales plummeting by 25 per cent and 15 per cent, respectively .
“Data for under construction projects need to be studied cautiously as most of the projects will take time to get delivered and will not be ready for occupancy for the next 1-5 years,” said Deepak Parekh, chairman, Housing Development Finance Corporation ( HDFC), India’s biggest mortgage lender. “Data for ready apartments is much lower. While saying that, it’s also true that the last one year has been slow and only affordable homes are selling.”
Parekh said he expects a 100 basis points reduction in interest rates in 2015 over and above the announced rate cut. “This will lead to easing pressure of (home loan) EMIs (equated monthly installments) and revival in demand post July,” he added.
On a quarterly basis, home sales saw a 31 per cent rise, with the National Capital Region posting a 60 per cent increase over the previous quarter, the highest among all cities. This was on the back of several offers by developers, which caused prices to effectively dip by 2%
Hyderabad saw healthy improvement, with sales rising 55 per cent quarter-on-quarter, while Pune and Bengaluru saw sales rise 36 per cent and 27 per cent, respectively . The Mumbai Metropolitan Region was the only area where sales dipped, by 3 per cent, in the quarter while prices remained stagnant.
The improvement in sales as against the previous quarter can be attributed to the October-December festive season, during which home buyers prefer to conclude deals.