NEW DELHI: The festive season has failed to bring cheer to the real estate market, with builders and brokers reporting "notso-encouraging" sales over the past two weeks. Unlike the boom years, builders this year had resisted the temptation to launch new projects in the season, focussing instead on reducing the inventory that has piled up over the past few quarters.
According to property research firm Liases Foras, there were about 7.6 lakh unsold apartments across India at the end of June. "There isn't such a big boost. The festive season is not so encouraging this year, despite the offers," said RK Arora, managing director at Noida-based real estate firm Supertech. "But we are hoping for a turnaround soon."
The company has launched a festive season scheme for its existing projects in Noida, where buyers can pay 10% at the time of booking and the rest on possession.
Several other builders across markets have launched subvention schemes in existing projects to perk up the demand.
Only 27 new projects were launched this September across the top 15 cities against 279 in the same month last year, according to PropEquity. "There is too much existing inventory waiting to be sold," said Samir Jasuja, managing director at PropEquity.
Santhosh Kumar, chief executive-operations, at property advisory firm JLL, said there is not enough confidence among developers to launch new projects. "Sales during the festive season are much lower than expectation," he said.
Brokers say many buyers are making enquiries, but sales are still not happening at the pace that is usually associated with the festive period. Abhishek Anand of Noida-based brokerage KR Associates said his firm had sold 40-50 apartments every week during the 2012 festive period, but now they are hardly able to sell five. "Buyers are still a scared lot," he added.
But with the job growth data for the quarter to September reflecting a two-year high, some builders see a revival in the real estate market by the end of March. "The sentiments have started to change, but it will take time for sales to come back," said Arora of Supertech.
Sanjeev Srivastava, managing director of Assotech Developers, said this is just the beginning and sales may pick up over the next few months. "Sales might not be up to the mark now, but things are improving fast," he said. Demand for homes is also expected to improve on the back of higher office-leasing activity across the country in the last two quarters, which would mean creation of more jobs. Several large office-lease deals were signed in the past few months.
According to an informal survey of top property consultancies in India, top corporates across sectors are looking to lease over 40 million sq ft of space in the top seven cities over the next 12-18 months.