NCR has witnessed a 3-5% decrease in average per-square-foot property prices over the last one year (Q4 2016 – Q3 2017). See chart below: Currently, NCR has the maximum number of unsold units among all the top cities in India. An approximate 2 lakh unsold units are stocked up across different cities in the region. Greater Noida has maximum share of unsold inventory, followed by Gurugram.
There are many reasons for the price decrease in NCR. To begin with, excessive delay in project construction and possession has hurt buyers’ sentiments and led to subdued demand. Also, many projects have been stalled due to agitations and litigation issues. The massive unsold inventory itself has acted as a sentiment suppressant – and finally, while demonetization, RERA and GST are potentially positive moves for the industry, they have played a significant role in reduced buyer sentiment, contributing to the price falls.
Prices are likely to remain stagnant for a few more quarters. Factors such as the huge unsold inventory, recent cases of developers’ bankruptcy or insolvency and the huge number of stalled projects have made buyers skeptical about the market. Also, delay in execution and dilution of RERA have acted as dampeners for buyers’ confidence. Prices are unlikely to rise near term.