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Biggest drop in housing prices in a decade

13 January 2018

Customers who drove a hard bargain got reductions of up to 10% in apartment prices, in the form of cash discounts or freebies, says Knight Frank's latest report on the sector.

Residential market prices have dropped substantially in the Kolkata market in the second half of 2017 while annual launches have fallen by 47 per cent during the period, according to study by real estate advisory firm Knight Frank.

"Ready to move in category seems to do better when it comes with a brand assurance and a developer with a good record, and the second half of 2017 has shown that the real estate market in Pune is in fact a consumer's market and the best time to invest in real estate is now", Paul said, adding that what an investor should be really looking at is that execution of the project, strong track record of developer, and depending upon the need, it is advisable to buy or invest in a property.

With trickling sales and sharp drop in launches, he said the unsold inventories in NCR have come down, still it would take more than four years to clear the unsold stocks.

"On the residential market front, launches, between July and December, hit a new low, largely due to RERA (Real Estate Regulation and Development Act) and its impending implementation".

Zaidi said the average BSP (basic selling price) has come down by 2 percent during 2017. Piled up inventory, lack of consumer confidence due to litigations and infrastructure delays combined with the introduction of RERA and GST together caused a steep 56% drop in the number of units launched past year (y-o-y).

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"Until the end of 2017, India's residential sector had shrunk to a fraction of its size in less than a decade", said Shishir Baijal, chairman and managing director, Knight Frank India, adding that "all in all, it is a buyers' market today". "This includes bouquet of incentives such as waivers on stamp duty, floor rise and assured rental schemes". "Compared to sales and launches in 2011, the fall in 2017 is 56% and 86% respectively".

In terms of sales the Mumbai market recorded 19% uptick in H2 2017 over the demonetisation-hit same period a year ago, however overall sales volumes reflect a declining pattern. Across markets, level of unsold inventory dropped by 19 per cent to 5, 52,996 units.

The RERA came into force from May 2017, while the GST was launched in July past year.

It presents a comprehensive analysis of the residential and office market performance of Hyderabad for the period July December 2017, a company release said.

"The office market has witnessed newfound buoyancy with new completions recording double digit growth for the first time since 2012". This has ensured a severe contraction in the Pune residential market.

Biggest drop in housing prices in a decade