Unsold housing inventory mounts to 1.7 lakh units in the NCR: ASSOCHAM

NEW DELHI: The NCR residential market is stuck with an estimated inventory of 1,70,000 units while another 90,000 dwelling units that are under construction are likely to be delayed for hand-over, according to a survey by industry body ASSOCHAM. 

"A large inventory is piling up despite prices correcting by over 20 per cent in the last one year, while there is a huge fall in the new projects being launched by developers who are hard-pressed for cash," the study said. 

ASSOCHAM pointed out that the increase in inventory level is because of falling demand from actual users as well as investors. A majority of the respondents who were part of a survey of 120 real estate developers in the NCR, said that even ready-to-move-in flats are finding few buyers. 

The survey reveals that demand for buying property in the NCR has decreased by over 30-35 per cent over the last year. 

The ticket price for 3-bedroom, 2-bedroom and single room apartments have corrected by 30 per cent in Noida, 25 per cent in Gurgaon and 15 per cent in some key areas of Delhi but demand is still subdued, according to the survey. 

"The sentiment in the housing market is really at a low key. Even though there are signs of macroeconomic improvement, it would be a quite a lag before it gets reflected on the real estate markets," said DS Rawat, secretary general of ASSOCHAM. 

One of the big issues highlighted by the survey is the high level of debt with the real estate developers and their poor valuations in the stock markets, limiting their avenues to repair their balance sheets. 

"Somehow, it reflects in the timely delivery of the projects, coupled with the problems created by high interest costs despite some course correction by the Reserve Bank of India (RBI)," the survey said. 

According to survey, the residential market has witnessed a steep decline by 30-35 per cent in new launches as well as demand resulting a significant shrinkage. The unsold inventory pressure in NCR region is the highest among all other cities. 

The NCR residential market still has an estimated 1,67,000 units of unsold inventory which is approximately 30 per cent of the units under construction, according to the survey.