Unsold housing stock piling up in Delhi-NCR
Delhi-NCR: A total of 5.2 lakh residential units are under construction in Delhi-NCR of which around 1.4 lakh are lying unsold owing to weak demand, states a recent report by property consultant Knight Frank.
Around 31 percent fall has been observed in the new home launches in NCR at 33,500 units during the second half of 2012-13 fiscal compared with the year-ago period, while sales fell by 12 percent to 33,200 units in the review period.
The report said that there has been a steady price appreciation in most of the micro-markets even though demand remained subdued in the NCR market. It attributed the rise in prices to increase in construction cost and investor demand.
At present, nearly 5,20,000 residential units are under various stages of construction in the NCR market. The NCR residential real estate currently has an estimated 1,40,000 units of unsold inventory which is approximately 27 percent of the units under construction, revealed the report.
About 66 percent of the unsold units are concentrated in Noida and Greater Noida as a number of important projects are coming up in these cities. Both the markets together constituted nearly 78 percent of the unsold units, reports Knight Frank.
Nearly half of the total housing stock that is under construction is expected to be completed by the end of 2014 and early 2015.
However, the developers continue to be under pressure as the construction costs have increased and also due to lack of funds. Real estate in Delhi-NCR has remained slow because of sluggishness in the market.
The consultant said that nearly 33,500 residential units were launched in H2 FY13, which shows a slump of of almost 31 percent compared to H2 of FY 2012. NCR residential market observed a total absorption of 33,200 units in H2 FY13 showing a fall of about 12 percent compared to H2 FY12. Around 65 percent of the absorption is seen in the affordable and mid-segment housing, it added.
On the outlook, Knight Frank said that NCR residential market shows a cautious outlook owing to the slowdown in both project launches and absorption. Developers are also witnessing liquidity crunch as there is fund scarcity, which is in turn adding to the slowdown in construction activity and project delays.
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