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"Many people are desperate to sell today as they need money for alternative use. These people are willing to sell at a much lower profit," said Santhosh Kumar, CEO, operations, at real estate consultancy JLL India. In a recent deal, an apartment built on a 1,200 square yard plot in Delhi's posh West End area was sold for Rs 13 crore.
The sellers were asking for Rs 17-18 crore a year back. During the peak, it would have sold for around Rs 22 crore. Similarly, a builder sold a floor in Niti Bagh for around Rs 13-14 crore, climbing down from his ask of Rs 18-19 crore about 10 months ago. A 1,200 sq yard plot in Hauz Khas that a family was asking Rs 60 crore for six months back isn't getting sold for Rs 45 crore today.
A south Delhi broker, who did not wish to be named says every builder today has unsold inventory. "Many of them are unable to hold on to this inventory anymore as they are strapped for cash." MK Minocha, general manager, luxury housing, at Delhi-based builder Uppal, said, "There is a correction because buyers are taking time to decide. They are still waiting." In Gurgaon's Phase 1 area, a second floor apartment has been sold for Rs 1.72 crore to an end user, down from Rs 2.25 crore that the seller was asking for some time back.
Even in not so prime areas such as Chittaranjan Park, brokers say apartments that were quoting at Rs 2.4 crore are now available for Rs 1.8 crore. While piling up of inventory is a major culprit, the recent decision by the government to increase circle rates in the capital has also impacted sales. Buyers clearly have the upper hand, and are negotiating favorable payment terms of up to six months from the standard three months so far. Kumar of JLL India said many buyers and investors are waiting for further correction.
"Also, people do not have the kind of confidence on getting returns from real estate that they did earlier. That confidence is back in the securities market but not here," he said. As a result, a lot of residential apartments in areas such as Vasant Vihar, Defense Colony, Greater Kailash, New Friends Colony, Panchsheel Park and Gulmohar Park are lying vacant, increasing the stress. Some brokers say the situation is showing signs of improvement.
Mudassir Zaidi, national director — residential at real estate consultancy Knight Frank India, said that while the market is still slow, there is slight improvement since the new government has been sworn in. "Sellers were asking for unreasonable prices during the peak. Now both sellers and buyers are becoming more rational because of which deals are starting to happen," he said. Sunil Kapur of property broking firm KK Real Estate said that for many months it was hard to sell anything.
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