Real Estate developers worry as sales fall
The launch of new residential projects and absorption of dwelling units that are ready or under construction fell to a two-and-a-half-year low till May. This is the latest month for which data is available.
A total number of 22,290 dwelling units were launched between April and May in the seven key Indian real estate markets of the Mumbai Metropolitan Region (MMR), the National Capital Region (NCR), Bangalore, Chennai, Hyderabad, Kolkata and Pune. This data is 69 % lower than in the January-March period of the current year. Real estate analytics and research firm PropEquity came up with this data and this does not bring good news to the real estate developers.
This is the lowest quantum of new launches since January-March 2012. New launches of residential homes reached a peak of 1.25 lakh units in the April-June 2013 period. Because of lack of adequate revenues and bank funding, the real estate developers have put new launches of residential projects on hold.
They are waiting to clear off the existing inventories and add some revenue to their treasuries before they launch any new projects. Absorptions, or the number of units sold, have also come down to 30,094 units during April-May 2014. This figure is 45 % lower than in the January-March period.
Absorptions rose as high as 98,000 units during January-March 2013. The customers are waiting for the property prices and interest rates to cool off. This has resulted in a sluggish trend in the Indian real estate market which is continuing over the last two years.
The earnings of major realty developers in the June quarter have gone down drastically. DLF, India’s largest real estate developer by market value, reported a consolidated turnover of Rs 1,853 crore for the quarter ended June 30. This figure is 25 % lower over the year earlier.
Saurabh Chawla the executive director (finance) of DLF stated that DLF’s sales performance remained muted during the quarter. It continued to face challenging situations in most of the micro-markets it is present in. Chawla also told the analysts that the company does not expect this environment to improve in the next few quarters.
Source- The Financial Express
Bangalore-based real estate developer, Indian real estate developers, Mumbai Metropolitan Region, Real Estate Developers, Real Estate Sales
