All is not well in the realty sector these days. According to the experts, after the slump of the year 2008 in the sector which also saw a speedy recovery, the ongoing one is going to last for at least 78 months.
The news is not good for the real estate moguls plus the promoters and real estate consultants who are, firstly, stressed on clearing off the inventory which has been stocked and secondly, waiting with a bated breath about the impending Real Estate Bill-2015.
The stocking up of inventory is happening mainly in the Non Capital Region (NCR) where the developers have tried all their tantrums to woo the buyers but to no avail. I guess, this is the lowest ebb of the real estate situation here because I have heard of one plus one offers in garment retail segment but buy one flat and get another free is unrealistically heard of. What's more to it is even this tactic has gone unnoticed among the buyers. Whopping discounts, free flat TVs, easy installments and even free cars have not helped the plummeting market situation in NCR as buyers are apprehensive of builders.
The situation is quite opposite in Mumbai which is now recovering and gaining the trust of the buyer gradually. According to Liases Foras Real Estate Rating and Research Pvt. Ltd, around 9,020 housing units were sold in NCR during January-March 2015, coming down from 15,053 units a year ago. Unsold inventory in the same period rose 12.63% to 235,908 apartments from a year ago.
Why has that happened?
Although huge stretches of the country has been affected by the slowdown, but it is particularly the NCR builders which have been under the stress. That is mainly because the builders have always focused their projects for the investors and not the end users. With such a scenario, the resulting loss of faith of the home buyers had led the entire apprehension loom large over various aspects of the real estate.
The existing realty investors are now trapped with buyers nowhere to find. Even if they find a prospective buyer, they find themselves at loss; they have to sell at a much lower price since the property prices have fallen. The situation is so bad that even with a price correction of 15-20%, there are no buyers.
Is there any solution?
The developers in Gurgaon are mulling to shift their focus from large projects to smaller ones. They are planning to construct a 3 BHK apartment with area 1,300 sq ft now which earlier used to be 2,200 sq ft. The price correction is obvious to follow with this shift. This means, if one is looking for a 2 BHK apartment in Gurgaon, his requirement for an expansive space shall be shattered and instead, he will be offered to squeeze in a smaller size. Thus, we can conclude that property in Gurgaon will now be available at a lower price but it also comes with a smaller size.