Jagmohan Garg, a leading Delhi-based realtor, believes that the real estate market of National Capital Region (NCR) has been hit hard by the ‘triple tsunami’ of demonetization, new Real Estate Regulatory Law (RERA) and Goods and Services Tax (GST). These moves have also impacted the number of new launches, sales and prices in the real estate sector over the past few months.
A recent study highlighted that the number of new realty project launches fell by 73% between January and June 2017, in comparison to the same period last year. With less than 5,000 new residential units launched during this period, it is said to be the lowest recorded realty launches in the past decade. Also, majority of the units launched cost less than 25 lakh.
Similarly, a 26% fall in realty sales was observed this year in the NCR. As a result, it has the highest number of unsold inventory of residential flats in the country. Mera Baba Group owner Jagmohan Garg adds that this is accompanied by a 20% correction in NCR’s residential property prices over the last 18 months, and the inability of the Uttar Pradesh and Haryana governments to enact provisions of RERA as per the timelines prescribed by the Centre.
The area of Faridabad reportedly took nine years to clear its existing residential projects’ inventory. Though, the past record shows that the overall inventory in the NCR is likely to take over four years to liquidate.
Clearly, the current stagnancy in the NCR’s real estate sector makes it unfavorable for the prospective real estate investors, says Jagmohan Garg. Also, its prices have witnessed lower growth rates than retail inflation. A similar trend of decline in the NCR property prices has been going on from the past three years with no hopes the next quarter, or year being better. The number of office space transactions also saw the lowest pace of activity in four years.
Majorly impacted by demonetization, the NCR’s realty sector is still smarting from the blow. It is said to be far worse than the rest of the country.
Keeping in mind the current scenario, realty expert Jagmohan Garg advices investors to wait for a couple of years in the NCR and look forward to the new projects with full GST benefits to come up.