Decline in Home Sales as Property Prices Go Up

Whereas, Bangalore has seen only 3 percent drop in residential unit sales. The reason behind the stable nature of Bangalore’s real estate market is affordable property prices and demand for residential units from IT professionals, according to Gaurav Pandey, PropEquity senior vice president & head - research and consulting.

Shveta Jain Executive director of Cushman and Wakefield stated that, for a large section of home buyers, buying a property became unaffordable due to the hike in property prices, resulting in less demand for property both from investors and potential home buyers.

Not only increase in property prices has made property unaffordable but also increase in home loan interest rates plays an important role in it.

According to PropEquity report, the sale of residential units in Delhi-NCR has dropped by 47,363 in January-August 2012 from 81,725 last year same period. In MMR, the sales volume dropped by 45,049 in the same quarter from 68,740 in 2011. Considering the current situation, developers are now concentrating more on selling their unsold inventories then launching new ones, said the report.