Anticipating the growing appetite for affordable homes, the quantum of new launches too registered an impressive growth of over 14% (quarter on quarter) with developers executing over 47,000 new homes, about 60% of which would come under affordable homes category. Priced at less than Rs 50 lakh, the affordable segment is expected to drive the market going forward. The market seems to be finding its base with sales hovering around the 55,000 units range for the past two quarters. “I am expecting homes sales to pick up further during the peak festival season starting from October till December, facilitated by incentives such as spot discounts, flexible payment plans, waiver of registration, stamp duty and other freebies like gold coins etc.,” said Jhanwar.
The enactment of the Real Estate (Regulation and Development) Act (RERA) has also boosted the end users’ confidence with many fence sitters entering the market now, albeit slowly. The Act obligates developers to be more transparent with buyers, while ensuring the timely delivery of homes. Increasing sales also reflect the realisation among buyers that prices are not going to go down further, thus helping them to make quick and firm decisions.
But the inventory hangover still haunts many top tier cities like Gurgaon which are basically luxury markets having a price-tag of above Rs 75 lakh. Inventory overhang, on an all India basis, still remains high at around 36 months, which means that at current absorption rate it would take about three years to exhaust unsold homes. Besides higher prices, falling sales in Gurgaon also reflect the delivery issues that have entangled many genuine buyers. “To entice end-users in such luxury markets, the equilibrium (in prices) is still to be reached,” Jhanwar added.