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Planning to buy a house in Delhi-NCR? Prices likely to fall further

business Updated: May 22, 2015 00:56 IST
Timsy Jaipuria
Timsy Jaipuria
Hindustan Times
House prices in Delhi NCR

Are high prices in Delhi and NCR keeping you away from buying your dream home? You may be in for some good news, as prices are likely to decline in the next three to five months.

For the first time in the last three years, sales of residential properties across Delhi and the National Capital Region (NCR) have registered an over 50% drop in January-March 2015, which according to experts builds a strong case for a price decline.

In some pockets, prices fell 20% to 25% in 2014, and with sales showing no signs of improvement, developers are likely to slash prices by another 15% to 20% to clear up unsold inventory, experts said.

"Sales are down 50% during January-March 2015 against a year ago and new launches have reduced. This has led to a constant piling up of unsold inventory," Ashutosh Limaye, head, research and real estate intelligence services, Jones Lang LaSalle India, told HT. "Unsold inventory in Delhi-NCR is at its peak of 170,000 units in January-March. Given such a trend, prices are set to fall by 15% to 20% in next three-five months."

Of the total 145,000 unsold units in the NCR at the end of March 2015, Noida saw the maximum inventory pile-up of over 100,000 units, followed by Gurgaon (26,000 units), JLL said.

Echoing similar sentiment, realty research firm PropEquity CEO Samir Jasuja said, "sales of residential units in NCR have dropped 78% from 26,110 units in January-March 2013 to just 5,729 in the same quarter of 2015. This is primarily due to a demand and supply mismatch, and investors moving away from the sector."

The constant drop in sales has made it a buyers market against an investors market, he added.

Prices in the sector fell 20% to 25% across NCR in 2014, and the trend will continue if sales do not pick up in the remaining quarters of 2015, according to PropEquity.

A buyers' market refers to one where an end user invests for his/her personal use, and does not put it out on rent or trades in it. An investors' market is one where a person buys a property and either sells it at a premium even before delivery, or puts it on rent.