New launches for residential projects are at a stand still
Due to the lack of demand in the residential real estate sector, most of the developers are sitting on a huge inventory of finished dwellings. The cash flow is poor which is forcing the builders to focus on completing projects to generate cash flows, rather launching new projects. It is estimated by the market analysts that it will take about three years to find buyers for these completed projects.
Real estate developers in the National Capital Region (NCR) are troubled by the oversupply of homes. This offers greater choice to the buyers; however the not chosen ones remain unsold. Steep prices of the residential units continue to dampen sales in the Mumbai metropolitan region (MMR).
Delhi-based Parsvnath Developers Ltd has no launches planned in the coming months except the one for which it had raised money from the private equity (PE) firm Red Fort Capital Advisors Pvt. Ltd. The chairman Pradeep Jain’s team is focussing on selling unsold homes to raise money. Jain stated that here is no point in new launches because investor sentiment is low and the sales momentum is detrimental for the profit margins of the company.
Jain also mentioned that Parsvnath Developers has 40 projects under its belt which are in progress now. Since a large area is already under construction, the company wants to focus on their completion, execution and delivery.
Source- Mint
Builders freeze new launches, Builders sitting on a mountain of unsold homes, delaying new launches, focus on delivery as sales slow
