Realtors Hold Their New Launches to Clear Pricey Inventories

Realtors Hold Their New Launches to Clear Pricey Inventories

By siliconindia   |   Tuesday, June 26, 2012   |    1 Comments

Bangalore: Real estate developers have slowed down their new project launches to sell off their expensive unsold inventories in an effort to maintain prices in this sluggish market, reports Ravi Teja Sharma of Ravi Teja Sharma of of  ET Bureau.  

Developers across India believe that the market is already loaded with inventories and launching new projects would only create pressure on pricing, according to analysts tracking the property market. Vineet Chandak, real estate analyst with IDFC Securities, stated that "If they launch at a lower price today, their existing unsold inventory will get hit."

It has been observed that in one year, residential project launches in prime metros like Delhi-NCR, Mumbai and Bangalore have fell down by 30-50 percent, according to the estimation of research and analytics firm, PropEquity. The firm also estimates that in the January-March quarter, new residential project launches dropped by 49 percent year-on-year in the Delhi-NCR region, followed by 31 percent slump in the Mumbai Metropolitan Region (MMR). Whereas the south cities like Bangalore, Chennai, Pune and Hyderabad witnessed the slump of 45 percent, 42 percent, 44 percent and 77 percent, respectively.

On this note, Samir Jasuja, chief executive officer at PropEquity, stated that "Developers across the country are delaying project launches to maintain pricing and clearing their unsold inventory that was launched at higher prices," reports Economic Times.

Shakti Nath, managing director of Logix Group, cited that "Slow sales are forcing developers to go slow on launches. Unfortunately, because of high costs, developers do not want to drop prices, which will be the cases with some new launches.”

"Lesser project launches will keep future supply of homes in check and reduce pressure on prices. But if the market situation continues in the same way, it will surely have an impact on pricing," says Anshuman Magazine, chairman and managing director of property advisory firm CBRE South Asia.

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