NCR Housing Sales Plunge Amid Inventory Shortage and Price Surge
The National Capital Region (NCR) witnessed a 7% decline in housing sales between July and September due to a shortage of inventory in the affordable segment and a surge in home prices.
Housing SalesNcrInventory ShortagePrice SurgeAffordable HousingReal Estate NewsOct 03, 2024
Experts say that the new housing supply in the region is mostly in the premium and luxury segment, above Rs 1-crore ticket sizes. This has led to a major dent in the homebuying segments, with homebuyers being forced to shift towards higher ticket sizes. The market is expected to bounce back only when either the prices come down or a major supply of inventory hits the sector in the less than Rs 1 crore segment.
The mid-segment sales have also shown a continued downward slide in terms of sales, following the affordable housing downfall across cities. The sub-Rs 50 lakh segment (affordable) showed a 14% decline in sales nationally for the July-September quarter, while sales in the Rs 50 lakh to Rs 1 crore segment recorded a 13% drop over the same period.
Sales growth in the residential segment has been singularly driven by the over-Rs 1 crore segment, which grew by 41% year-on-year in the July-September quarter. However, low levels of supply are affecting sales in the affordable and premium categories, with launches in the affordable segment down 2% year-on-year and those in the mid-segment reporting an even sharper drop of 24% over the same period.
The increase in home prices, as well as mortgage rates due to tight monetary policy, has affected sales in the affordable and mid segments more than the above-Rs 1 crore segment. Recent reports have indicated that home prices in Mumbai have risen by more than 30% over the past two years, with mortgage rates increasing by 150-200 basis points over the same period. This has kept first-time homebuyers, as well as investors, in the wait-and-watch mode, as they wait for prices to cool down.
Frequently Asked Questions
What is the main reason for the decline in housing sales in NCR?
The main reason for the decline in housing sales in NCR is the shortage of inventory in the affordable segment, particularly in areas like Gurgaon and Greater Noida.
Which segment has shown a continued downward slide in terms of sales?
The mid-segment sales have shown a continued downward slide in terms of sales, following the affordable housing downfall across cities.
What is the growth rate of sales in the over-Rs 1 crore segment?
The sales growth in the over-Rs 1 crore segment has grown by 41% year-on-year in the July-September quarter.
How have mortgage rates affected sales in the affordable and mid segments?
The increase in mortgage rates due to tight monetary policy has affected sales in the affordable and mid segments more than the above-Rs 1 crore segment.
What is the expectation for the market to bounce back?
The market is expected to bounce back only when either the prices come down or a major supply of inventory hits the sector in the less than Rs 1 crore segment.
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