NEW DELHI: Residential property prices are likely to decline in the next three to five months, according to a report by Hindustan Times.
For the first time in the last three years, sales of residential properties across Delhi and the National Capital Region (NCR) have registered an over 50% drop in January-March 2015, which according to experts builds a strong case for a price decline.
In some pockets, prices fell 20% to 25% in 2014, and with sales showing no signs of improvement, developers are likely to slash prices by another 15% to 20% to clear up unsold inventory, experts said.
"Sales are down 50% during January-March 2015 against a year ago and new launches have reduced. This has led to a constant piling up of unsold inventory," Ashutosh Limaye, head, research and real estate intelligence services, Jones Lang LaSalle India, said. "Unsold inventory in Delhi-NCR is at its peak of 170,000 units in January-March. Given such a trend, prices are set to fall by 15% to 20% in next three-five months."
Of the total 145,000 unsold units in the NCR at the end of March 2015, Noida saw the maximum inventory pile-up of over 100,000 units, followed by Gurgaon (26,000 units).
Echoing similar sentiment, realty research firm PropEquity CEO Samir Jasuja said, "sales of residential units in NCR have dropped 78% from 26,110 units in January-March 2013 to just 5,729 in the same quarter of 2015. This is primarily due to a demand and supply mismatch, and investors moving away from the sector."
The constant drop in sales has made it a buyers market against an investors market, he added.
Prices in the sector fell 20% to 25% across NCR in 2014, and the trend will continue if sales do not pick up in the remaining quarters of 2015, according to PropEquity.