Demonetisation has led to Delhi-NCR’s real estate sector witnessing one of the lowest slumps since 2010, a report by real estate consultancy Knight Frank has said.
According to the half-yearly report, Delhi-NCR witnessed a dip in demand and supply by 29 per cent and 73 per cent respectively.
The report said that new launches in Delhi-NCR dwindled to 26,735 units in 2016, registering a year on year 58 per cent drop compared to 2015.
Sales also registered a year on year drop of 18 per cent and even the festive season failed to infuse life in the dull market as sales decline to 40,000 units in 2016, the report said.
The report attributes the 73 per cent dip in new launches in residential sector and sales volume plunging down to 53 per cent to demonetisation.
Office space dries up
In the office sector, the report said that project delays have dried up office space supply in NCR and new completions have dropped to an all-time low.
Only 4.6 million square feet of new completions entered the office market in 2016, as opposed to 11.5 million square feet in 2015, the report said.
The report’s sector analysis of NCR office market indicates other sectors is at 36 per cent followed by manufacturing and IT/ITeS at 28 per cent each in terms of transactions.
The report said that Gurugram took up 63 per cent of the total transaction pie of 3.8 million square feet with 57 per cent of the total 107 deals in 2016 and yet again emerged as the most preferred business district.
“The NCR residential market has been under pressure and 2016 was no different. The market has been in a downward slide since 2010 with every passing year hitting a new low,” said Rajeev Bairathi, executive director and head of Capital Markets, Knight Frank India.
“Piling up inventory, lack of consumer confidence due to litigations and infrastructure delays are some of the major factors that have decelerated new launches in NCR,” Mr. Bairathi said. “The market did start giving indications of marginal recovery in Quarter 3, 2016 owing to developments like project deliveries, reduction in prices and improving infrastructure in places like Noida Extension and Noida–Greater Noida Expressway,” he added.
‘Huge blow’
“Demonetisation dealt a huge blow to the NCR realty market and the Quarter 4, 2016 numbers are a testament to this,” Mr. Bairathi said.
“As the sales number for the first nine months had shown an optimistic trend, we believe that 2016 would have been at par with 2015 had it not been for demonetisation,” Mr. Bairathi added.
