Slump In Delhi-NCR?
Real estate market in NCR is going through a bad phase at present as there is a staggering discord between the market’s supply and demand. How can this slump be overcome? What are the steps the local municipal bodies can take to improve the market conditions? Let’s take a look.
According to recent research, real estate business in Delhi-NCR has hit an all-time low over the last three years. While the business has headed downhill, the prices, on the other hand, are simply going up. Within a span of a year, property prices in Noida and surrounding areas shot up by about INR 2800 per sqft in 2014 to INR 3500 per sqft this year. These high rates have managed to keep prospective investors away, leading to further slow down in the realty market. So, what exactly is the issue and what is the solution, you ask? Read on to find out.
The Supply-Demand Conundrum
For the market conditions to remain positive, there needs to be a balance between the supply and demand. Suppose, there is a need for 100 plots but the market only has 80 plots to offer. Here the demand for these plots is a little more than what the market is capable of offering. In such instances, the prices of these 80 plots will go up because people usually haggle with higher bids to secure these lands.
The situation in Delhi is exactly the opposite. There is a huge supply of new residential projects while the buying market is rather steep. In fact, over 35% to 40% of residential properties in the Noida region alone remain unsold. This roughly translates to over 40,000 unsold units.
Builders Set To Lose Money
Considering the statistics mentioned above, the current state of builders and developers across Delhi is rather bothersome. Almost all the developers around the NCR region have a huge inventory pile-up which they aren’t able to get rid of. The pile-up can be attributed to the alarming price increase since the end of last year. The new prices were so high that several people planning to buy houses decided against it. Over time, the sentiments of almost all homebuyers in Delhi synchronised as no one took the risk of investing in an over-priced house.
Several attempts of the builders to serenade home buyers with attractive offers and deals too have gone unnoticed.
So What Is the Solution?
To bring some normalcy to the market conditions in Delhi-NCR, many realty experts have suggested price correction as the way to get the real estate business up and running. While the builders will be against it, there really is no other choice for them but to cut the prices and get rid of their inventory. A price correction of about 10% to 20% could easily improve the state of the market by positively influencing the buyers’ sentiments.
Who Will Gain From The Price Corrections?
When price corrections happen, which it will within the next six months, new home buyers will be the biggest winners. They will most likely walk away with keys to their dream house while getting a cut-price deal. Imagine if the correction is set at 10%, home buyers will get a house that would otherwise cost INR 50 lakh at about INR 45 lakh.
Hence, it is about time for you to buy a house in the national capital region. So, ready your finances, check commonfloor.com for residential properties in NCR, and buy your dream house when the cloud clears.
No comments:
Post a Comment