Time To Slash Realty Prices Amid Slowdown

Housing prices have increased substantially in recent quarters. In some micro markets in cities, prices have increased close to 100%. But earnings have not gone up, matching the price rise. Moreover, supply has gone up across cities - Satish BN, Founder & MD, Skydealz, tells Bizz Buzz

Bengaluru: After substantial fall of residential properties in recent quarters across major cities, real estate developers should reduce home prices for propping up the demand. According to analysts, higher home prices in recent quarters coupled with lack of income growth among buyers have led to slowdown in housing demand. Such demand slowdown has come after a surge seen in buying housing properties in the post-Covid period.

“Housing prices have increased substantially in recent quarters. In some micro markets in cities, prices have increased close to 100 per cent. But earnings have not gone up, matching the price rise. Moreover, supply has gone up across cities,” Satish BN, Founder & Managing Director of Skydealz, a real estate consultancy firm, told Bizz Buzz.

According to real estate consultancy firm, Anarock, housing sales fell 11 per cent during July-September to 1.07 lakh units in seven major cities on lower launches and an annual 23 per cent growth in average prices. As per the data, Mumbai Metropolitan Region (MMR) recorded the highest sales among the top 7 cities in the July-September quarter at 36,190 units, a 6 per cent drop from 38,505 units during the July-September period.Pune saw a 17 per cent decline in sales to 19,050 units from 22,885 units during the period under review.

Housing sales in Delhi-NCR fell 2 per cent to 15,570 units from 15,865 units. In Bengaluru, housing sales decreased 8 per cent to 15,025 units from 16,395 units.

Hyderabad recorded sales of 12,735 units, a 22 per cent fall from 16,375 units in the second quarter of ongoing financial year. Housing sales in Kolkata declined 25 per cent to 3,980 units from 5,320 units.

“Residential prices too seem to have peaked out and are now gradually stabilising across cities. Developers are likely to roll out several offers and discounts during the upcoming festive quarter to attract buyers,” says Anuj Puri, Chairman of Anarock. According to Satish BN of Skydealz, though there is a likelihood of RBI reducing interest rates next year, it may not have much impact on housing sales. “Given the price hike, even if RBI reduces interest rate, it may not prop up demand,” he added.

According to sources, buyers are preferring to reside on rental properties than buying own homes at this time because of the price hike. Moreover, slowdown in urban consumption is playing a role in pushing down the demand for residential properties.