With buyer sentiment subdued, developers are finding it challenging to sell apartments and flats, suggesting that prices may need to be adjusted.
Experts report that there are few takers for homes, particularly high-end ones, even if they are ready-to-move-in. An assessment by Colliers India notes, 'A large amount of available inventory and new upcoming supply is undermining short-term appreciation in capital values, both in the primary and secondary market.'
Home prices are lower in cities such as Pune, Mumbai, and Delhi-NCR compared to 2015. Data from Cushman & Wakefield show that prices have corrected in certain areas.
The second phase of Godrej Properties' Trees project in Mumbai has not received a positive response, with only around 100 units booked, far fewer than in the first phase of the project. The company has not confirmed the number of apartments on offer.
Sobha Developers reported a weak fourth quarter in FY16, with the March quarter being the weakest in the last four.
Sales in the NCR region are also slow. In Gurgaon, the demand for properties by Vatika and Tata Housing has been low.
Data from property firms show that launches are increasing in Mumbai, Pune, and Bengaluru. Between January and March, launches were 32% higher in Bengaluru, 34% in Mumbai, and 12% in Pune, according to a Colliers India report. Cushman & Wakefield estimated that new launches have increased by 25% year-on-year, after falling over 60% in the past two years. Criticism following the March quarter indicates that companies are shying away from sales projections, at best discussing a status quo. Real estate business has been better in Bengaluru; Prestige Estates and Brigade Enterprises have seen significant sales.