a4.5 lakh
under-construction residential units are likely to be delayed by up to 18
months.
aProperty
sales across India have dipped in the last year and a half because of rising
property prices.
aChennai
city saw 5,953 units absorbed down 21 % in January to March 2103
New
house sales may be few & far
between, but resale of properties is booming. Sale of such properties is up 40%
across India in the last six to eight months as buyers become more risk-averse
looking at the enormous construction delays, property brokers and financial
institutions say.
According to Punjab National Bank & Indiabulls
Housing Finance, about 35 to 40 % of home loans being taken today are for
resale properties, which include both apartments that are ready to move in and
those that are in the late stages of completion.
Mr. S.S Bhatia, GM (Retail) Punjab National Bank said, "Primary sales have slowed down and prices
have stagnated or dropped. Resale of properties, however, has been strong in
the last few quarters"
Time over-runs in real estate projects have become a
sore point with buyers.
According to real estate
research company PropEquity about half of the 9 lakh under-construction
residential units are likely to be delayed by up to 18 months.
Slowing of the economy to a 5 % GDP growth level too has
put doubts in the minds of homebuyers. Property sales across India have dipped
in the last year and a half because of rising property prices.
According to PropEquity, in the first quarter of the
current fiscal 13,797 residential units was sold in Bangalore compared with 9,
742 units absorbed in Q1 of 2012-13.
Other bigger markets like Mumbai Metropolitan Region absorbed 15,501 units,
down 21 %, National Capital region (NCR) absorbed 26, 798, up 31 % and Chennai
saw 5953 units absorbed down 21% in January to March 2103 as compared to same
period last year (2012).
Ms. Renu Sud Karnad, MD, HDFC said, "People are more comfortable today buying
houses that they can move in to or / have a visibility of getting delivery
soon"
Local brokers in Noida, Gurgaon, Mumbai, Bangalore and
Chennai say there are a number of speculators & investors in the market
today who have picked up under construction properties in the past 2 years.
These people, says Mr. Samir Jasuja, CEO, PropEquity, are desperate to get an exit
and so there are a lot of distress sales out making it a good time for
homebuyers to clinch deals.
"When the market is good, a property buyer would
have had to pay a premium for ready to move in houses or houses in projects
that are in their late stages but today he could land a discount," says Mr.
Harinder Singh, MD, Realistic Realtors, a real estate brokerage company
In the last two quarters, his company has seen primary
sales reduce by 70 per cent while resale of properties has seen a spike.
The resale segment today is dominated by end-users, a
majority of whom want to play it very safe, especially as they are bothered
about construction delays.
"There is certainly a shift. People are concerned
about delays and do not want to take risk when investing their
lifesavings," says Mr. Sumit Joshi, Director, Noida-based real estate
brokerage company Real Credit Consultancy, which helps clients get housing
loans from banks & Housing finance Companies (HFCs).
Most people wanting to buy a house in Noida, says Mr.
Joshi, are looking for houses that they can move in to within the next 6 to 8 months and are wary of projects where
they do not see construction reaching an advanced stage. While not all of these
end-users opt for a housing loan, banks / HFCs are certainly seeing an increase
in demand in this segment.
"We are seeing more number of buyers opting for resale
homes as prices continue to be largely stable in this category," says Mr.Gagan
Banga, MD and CEO, Indiabulls Housing Finance. A year back, says Mr.Joshi,
most people were opting for new projects being launched by developers across
cities.
In the past few quarters, new launches in different cities
too have dropped considerably.
Src: ET
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