MUMBAI/NEW DELHI: 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 2 per cent.
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 homebuyers prefer to conclude deals.
According to Liases Foras, 33 per cent of sales took place in the Rs 1 crore price, Rs 50 lakh-bracket, while 31 per cent sales were in the Rs 2550 lakh bracket. Interestingly, the weighted average price in most cities remained stagnant, except in Bengaluru and Hyderabad. Even while new launches declined, month's inventory in the NCR declined from 83 months to 51 months in the quarter, while that in Mumbai rose from 50 to 55 months.