Restrained demand slows down residential property sales in NCR
The first half of 2012 has witnesses a decrease in sales of residential properties in the National Capital Region (NCR) with Noida and Gurgaon seeing an accumulation of vacant stock due to restrained demand levels, according to a recent report. Markets such as Central and South Delhi, however, continued to lead the demand curve for high-end properties and independent plots.
Curiously, despite the slowdown, developers were not willing to reduce prices; investor interest continued to drive marginal price appreciation.
The latest CBRE report titled ‘Market View India Residential’ points out that the first half of 2012 witnessed the launch of 15 residential projects with approximately 6,400 units across various micro-markets of Gurgaon — significantly lower when compared to almost 23 projects launched during the same period last year. The Noida market continued to be of more interest to buyers on account of its comparative affordability when compared to Gurgaon; however, a marginal slowdown in demand led to reduced supply addition.
Rental values were stable in Noida, while those in Gurgaon witnessed appreciation by around 4-5 per cent, especially in key markets such as Sohna Road. Appreciation in capital values was subdued during the review period in Delhi as well as the suburban markets of Noida and Gurgaon. Leading micro-markets of Delhi such as Chanakyapuri, Panchsheel Park and Defence Colony witnessed appreciation of around 2–4 per cent, when compared to the second half of 2011.
According to Anshuman Magazine, chairman and managing director, CBRE, South Asia Pvt. Ltd, the decrease in residential sales can be attributed to dampened consumer sentiment due to high interest rates and weak economy. Both developers and home buyers alike are reeling under inflationary pressures. Home buyers and investors are in a cautionary mode and are deferring purchases in anticipation of interest rates reduction, he added.