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Residential sales across seven major cities fell 30% on a yearly basis in 2014 due to high price points, sticky interest rates and cautious buyer sentiments, said an article released by property consultant CBRE today.
The decline was noted across all major cities, but was particularly deep in NCR and slowdown was seen both premium and mid income housing projects, CBRE chairman Anshuman Magazine said in the article. . "The general slackness in residential sales was primarily triggered by the Affordability Index going down in certain cities. Housing sales remained muted even during the festive season, as a cautious buyer sentiment rode over discounts and attractive marketing offers. This is perhaps a signal that prevailing high property prices need to be rationalized in tune with average per capita income rates of Indian home buyers," Magazine added.
Magazine said many developers abstained from new launches due to subdued end user/investor sentiments."Consequently, new supply addition declined by approximately 25% y-o-y, with a strong rationalization reported during the second half of the year. This was particularly prevalent in the markets of Delhi NCR, Bangalore, Chennai and Pune. Despite the decline in new project launches, tier I cities continued to dominate the housing landscape, with DelhiNCR, Mumbai and Bangalore accounting for about 70% of the entire supply addition reported during the year," he said.
On a bi-annual basis, all major markets witnessed a slowdown in sales with the exception of Mumbai The city saw residential sales inch up marginally by about 7% over H1 2014-albeit a decline of about 2% on an annual basis.
