The report also suggested that the new launches of residential units had collectively come down by 78 percent at Mumbai, Delhi NCR, Chennai, Pune, Bengaluru, Kolkatta, Hyderabad and Ahmedabad.
However, since developers are not launching new projects rapidly, the impact on unsold stock has been positive. However, the July-December sales figures of these cities in 2017 were still significantly lower than the second half of 2014 and 2015, clearly depicting an underlying declining trend, the report said.
Despite the price cut, dearth of meaningful demand has continued to hold back sales even though rising inventory, a major overhang in the last three years, has significantly declined. It said for the first time in this decade, Mumbai witnessed a decline in quoted prices.
However, though the discounts offered in just-launched or under-construction properties in early stages were higher, sales in those units were slow since customers preferred to purchase ready-to-move-in homes or those nearing completion. The base price in Mumbai has declined 5%, which translates into an effective price benefit of as much as 12% for buyers once incentives such as a waiver on stamp duty are considered, he wrote.
The Indian property market will continue to face headwinds this year and no hardening of prices is expected, Das said at a press conference.
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Das said that "in terms of sales, the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period previous year, however overall sales volumes reflect a declining pattern". The developers also have unsold inventory down by 43 per cent which is due to the restricted launches that have eased inventory pressure, but highlighted the market stress.
If you have any home purchasing plans, you'd best hurry though since the report mentions that many developers are reporting a progressive increase in enquiries during the fourth quarter of the year. That's great news for homebuyers because average asking prices in the Chennai residential real estate market have come down by 3% since 2016.
"For the first time in this decade, the Mumbai market has experienced a drop in residential prices".
According to a report released by Knight Frank, political instability, recurring natural calamities and gloom in market sentiments stagnated signs of recovery noticed in the first half of the 2017 and Chennai residential real estate market recorded new lows in terms of new launches and sales of residential units during the second half of 2017. Sales, however, are up 5% annually, and with demand going up, a price hike may not be far behind.