It would take as much as 4.3 years to clear the existing inventory in the national capital region (NCR) and 3.5 years to clear the existing inventory in MMR (Mumbai Metropolitan Region), according to a new report.
Normally, the time taken to clear inventories should not be more than 8-10 quarters.
“The NCR seems to have been the worst affected by the slowdown with very little signs of recovery in the near-term followed by MMR" Ambit Capital said in a report.
Ambit said based on the discussions with registration officers in MMR, there has been 10-25% decline in footfalls in registration offices on a yearly basis.
"Furthermore, they also mentioned that whilst the number of people coming in for rental agreements has remained the same over the past year, the number of people coming to buy/sell property has sharply dropped over the past few months and so has the launch of new residential properties," Ambit said.
Ambit said discussion with another officer in the suburb of Thane led to the suggestion that in the month of January 2016, there has been a 90% YoY decline in registrations for agreement for sale. Further, yet another officer that it spoke to mentioned that his discussion with real estate developers suggests 2016 is a complete write-off so far as demand for residential real estate in the MMR is concerned.
Quoting data from property website PropTiger.com, it said even the average base selling price (BSP) for new launches in the NCR has declined the most in 2015 (between 1%-11%). In the MMR, the average BSP has increased by two% in 2015 whilst in Bengaluru, this has increased by 4.4%.