Amid rise in launches, NCR registers a decline in sale of flats, says report

Delhi and National Capital Region (NCR), which has been one of the fastest growing realestate markets in the country, saw a decline of 9% in the sale of residential units in the first quarter of 2023 as compared to same period in 2022, a report by Anarock, a realestate services company, said on Monday

Delhi and National Capital Region (NCR), which has been one of the fastest growing realestate markets in the country, saw a decline of 9% in the sale of residential units in the first quarter of 2023 as compared to same period in 2022, a report by Anarock, a realestate services company, said on Monday.

Gurugram, India-March 27, 2023: A view of the under constriction flats at Dwarka expressway way near sector-104; all other six major markets in the country witnessed rise in housing sales from three percent to 19 percent. As per a report released by Anarock NCR is the only city to see a decline (of 9%) in housing sales among all cities – from 18,835 units in first quarter of 2022 to nearly 17,160 units in first quarter of 2023, in Gurugram, India, on Monday, 27 March 2023. (Photo by Parveen Kumar/Hindustan Times)(Pic to go with Abhishek's story)

Barring Delhi-NCR, all other six major markets -- Mumbai Metropolitan Region, Bengaluru, Pune, Hyderabad, Kolkata and Chennai -- in the country saw a rise in housing sales ranging from 3-19% in the first quarter. Overall, this quarter, witnessed the highest residential sale in the past decade, said the report.

According to the report, NCR is the only city among the top seven cities to see a decline of 9% in housing sales. The region witnessed sale of 18,835 units in the first quarter of 2022, which came down to 17,160 units in the first quarter of 2023.

However, the number of launches increased in NCR this quarter, said the report. The region saw the launch of 12,450 units launched in the first quarter of 2023, which is an increase of 34% as compared to the first quarter of 2022, which saw the launch of 9,300 units.

Developers and real estate consultants also agreed that the sale of residential units had slowed down this year and attributed it to dwindling availability of affordable housing units, and hardening of the home loan interest rates.

The city, however, has witnessed a strong recovery in the premium and luxury market segments with major projects being sold at the time of the launch itself, they pointed out.

A key reason for decline in sales of new houses in the city, developers said, was the reduced margin in affordable projects and high input costs as a result of which many developers have converted their affordable housing schemes into plotted projects.

Realty experts also said there has been decrease in new affordable housing projects in Gurugram, which has been the mainstay of sales over the past three to four years. Although, the premium segment had made a comeback, that alone can’t make up for the decline in the sale of affordable units, they said.

Vinod Behl, real estate expert, said the drop in housing sales in Gurugram was on the expected lines as affordable housing has been severely hit due to continuous rise in home loan interest rates and increase in property prices.

Moreover, there is a dearth of ready homes which are much in demand. “The residential market is likely to witness muted growth in the next few quarters owing to hike in interest rate, lack of new affordable projects and uncertainty in the global economy. In the short run, things will remain difficult at least for the next one or two quarters,” he said.

The Anarock report said overall, 113,770 units were sold in the first quarter of 2023 as compared to 99,550 units sold in the same period last year.

The report said NCR saw the sale of 17,160 units in the first quarter of 2023, as compared to 18,835 units in the first quarter of 2022 .

Vikas Garg, joint managing director, Ganga Realty, said,” High interest rates and lean phase in the affordable housing segment are two key factors behind the decline in sales. On the other hand, the luxury and premium segments is on a continuous rise. The demand is expected to rise in the next quarters and this is borne out by the fact that there is a steep increase in the number of new launches this year,” he said.

Further, the decision of the Haryana government to go slow on its Deen Dayal Jan Awas Yojana scheme for plotted colonies has also reduced availability of units.

Pradeep Aggarwal, founder and chairman, Signature Global, an affordable housing developer, said,” Despite a rise in home loan interest rates, there has been minimal impact on demand nationwide. We anticipate that the demand will continue for at least a few more years, “ he said.

The Central Park group said the independent floors launched by them in the luxury segment has received an overwhelming response. “Prominent developers with a proven track record in delivery and luxury offerings have been instrumental in galvanizing the micro markets of Gurugram,” said Amarjit Bakshi, CMD, Central Park.

The Anarock report said there was a significant rise in demand for high priced homes above ₹1.5 crore.

Anuj Puri, chairman, Anarock, said, “Persistent inflation concerns along with another possible rate hike by the Reserve Bank of India in the near future could dent the growth trajectory in the upcoming two quarters. Once the dust of the ongoing economic disruptions settles, it is likely to regain again, backed by rise in homeownership sentiment.”