Residential prices to remain unchanged till December

Despite the fall in absorption rate, the residential prices have remained sticky

According to Jones Lang LaSalle, India, the absorption rate of residential houses in India in the first quarter of this financial year dipped from 14.9% to 13.6% in the second quarter of this financial year.

In other words, out of every 100 houses available for sale, only 12 get ideally sold. Which means, developers will further require 8 more quarters or two years (because 12.5% houses sold in 3 months) to sell their unsold homes. Hence, a lower absorption rate means developers requiring more time to sell houses.

Despite the fall in absorption rate, the have remained sticky and are expected to remain at same levels till December of this calender year.

The absorption rate in the ongoing October-December quarter is expected to remain between 14 and 15%, but the industry is still not expected to witness any price changes. This will leave developers with lot of unsold inventory on their books.

“During such times, developers usually sell only those many flats which will help them procure enough to work on their other projects. This helps them infuse money into their other projects leading to supply remaining constant or even more at such times. Hence, developers prefer this method than selling flats at discounted prices. This inturn enables developers to keep their unchanged,” says Ashutosh Limaye head research & intelligence services, Jones Lang LaSalle, India.

'The ongoing third quarter being the festive season, is likely to impact the fourth quarter's absorption rate positively. Hence, the current quarter will decide if there can be any correction in the early next year,” adds Limaye of Jones Lang LaSalle, India.

image
Business Standard
177 22
Business Standard

Residential prices to remain unchanged till December

Despite the fall in absorption rate, the residential prices have remained sticky

Yogini Joglekar  |  Mumbai 

According to Jones Lang LaSalle, India, the absorption rate of residential houses in India in the first quarter of this financial year dipped from 14.9% to 13.6% in the second quarter of this financial year.

In other words, out of every 100 houses available for sale, only 12 get ideally sold. Which means, developers will further require 8 more quarters or two years (because 12.5% houses sold in 3 months) to sell their unsold homes. Hence, a lower absorption rate means developers requiring more time to sell houses.

Despite the fall in absorption rate, the have remained sticky and are expected to remain at same levels till December of this calender year.

The absorption rate in the ongoing October-December quarter is expected to remain between 14 and 15%, but the industry is still not expected to witness any price changes. This will leave developers with lot of unsold inventory on their books.



“During such times, developers usually sell only those many flats which will help them procure enough to work on their other projects. This helps them infuse money into their other projects leading to supply remaining constant or even more at such times. Hence, developers prefer this method than selling flats at discounted prices. This inturn enables developers to keep their unchanged,” says Ashutosh Limaye head research & intelligence services, Jones Lang LaSalle, India.

'The ongoing third quarter being the festive season, is likely to impact the fourth quarter's absorption rate positively. Hence, the current quarter will decide if there can be any correction in the early next year,” adds Limaye of Jones Lang LaSalle, India.

RECOMMENDED FOR YOU

Residential prices to remain unchanged till December

Despite the fall in absorption rate, the residential prices have remained sticky

According to Jones Lang LaSalle, India, the absorption rate of residential houses in India in the first quarter of this financial year dipped from 14.9% to 13.6% in the second quarter of this financial year.

According to Jones Lang LaSalle, India, the absorption rate of residential houses in India in the first quarter of this financial year dipped from 14.9% to 13.6% in the second quarter of this financial year.

In other words, out of every 100 houses available for sale, only 12 get ideally sold. Which means, developers will further require 8 more quarters or two years (because 12.5% houses sold in 3 months) to sell their unsold homes. Hence, a lower absorption rate means developers requiring more time to sell houses.

Despite the fall in absorption rate, the have remained sticky and are expected to remain at same levels till December of this calender year.

The absorption rate in the ongoing October-December quarter is expected to remain between 14 and 15%, but the industry is still not expected to witness any price changes. This will leave developers with lot of unsold inventory on their books.

“During such times, developers usually sell only those many flats which will help them procure enough to work on their other projects. This helps them infuse money into their other projects leading to supply remaining constant or even more at such times. Hence, developers prefer this method than selling flats at discounted prices. This inturn enables developers to keep their unchanged,” says Ashutosh Limaye head research & intelligence services, Jones Lang LaSalle, India.

'The ongoing third quarter being the festive season, is likely to impact the fourth quarter's absorption rate positively. Hence, the current quarter will decide if there can be any correction in the early next year,” adds Limaye of Jones Lang LaSalle, India.

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard