The festive season might not bring any cheer to the real estate sector this year. Although realtors are busy unveiling new projects, property consultants say most of them are unsold or under construction. Property watchers say the new launches this season would be at least 10 per cent lower than the last festive season.
Unsold inventory and low absorption over the last two years have been the hallmark of Pune’s real estate market. Reports by multiple property watchers put the range of unsold inventory in the city at 40,000 to 60,000 units. As per the Knight Frank survey, the first quarter of this year saw the launch of 15,520 units, a 23 per cent drop from the same time last year. According to the report, the Pune market witnesses sales of 20,000-22,000 units on an average, and thus the lower figures are an indication of a slowdown in the market.
Shekar Bharadwaj, director of Brand Managers Media Private limited (a property event management company), stated that the launches this year have been on the lower side as compared to last year.
Partha Pratim Sengupta, general manager of State Bank of India (SBI), says that the bank has seen a slight increase in the home loan portfolio. “The total home loan dispersed in September 2015 stood at Rs 12,155 crore. In March, it was Rs 11,170 crore. This is an increase as compared to the March 2014 figure of Rs 9,183 crore,” he said.
Sengupta added that although unsold inventory is on the rise, a gradual rise in demand could be expected in the market. The average ticket size in Pune stands at Rs 30-40 lakh in the home loan category.
While the market has not seen any price correction per se, Sengupta said that indirect benefits are being offered to customers by the builders. “Waiver of stamp duty and registration are some of the common waivers. If these benefits are calculated, they come to at least 5-6 per cent of the property cost,” Sengupta said, adding that there has not been any significant increase in price per square feet, which is also an indication of the stress in the market.
Commenting on the festive season, Shveta Jain, executive director, residential, Cushman and Wakefield, pointed out how benefits like waiver of stamp duty, VAT, registration charges are synonymous with the festive season. Although such schemes benefit the end customer, she said such steps are taken by developers to increase sales volumes and clear unsold inventories.