New Delhi: Despite the RBI lowering its interest rate by 0.25 per cent, the real estate sector is unlikely to record higher sales during the ongoing festive season, an Assocham survey said on Sunday.
"Buried under high debt and inability of developers to complete and hand over pending projects well beyond commitments to hard-pressed consumers, the troubled housing sector is not witnessing any festive activity this year despite the latest cut in the policy interest rate by the Reserve Bank of India (RBI)," the Associated Chambers of Commerce & Industry of India (Assocham) survey said.
The survey is based on information gathered from 250 builders in Delhi-NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Hyderabad, Pune, Chandigarh and Dehradun.
The Assocham said the demand for new projects is low while new launches have come to a trickle, marked by a lack of consumer confidence and cash deficit of the builders.
"The demand for new launches has come down by over 50-60 per cent in Delhi-NCR and Mumbai, while it is lesser by about 40-45 per cent in Hyderabad and Chennai," the survey said.
"In Bengaluru, the activity has come to a total standstill, first by the demolition drive and then by Cauvery dispute agitation," it added.
It found that nearly 8-10 million workers engaged in building and other construction activities face uncertain future if the sector does not revive.
"Whatever market is there, it is mainly for the end-users and not for investors; so, sale has increased for the smaller units (2 BHK and 3 BHK)," the survey revealed.
"Customers are preferably looking for ready-to-move in property rather than going for under-construction property. But, not many properties fall in this category," said Assocham Secretary General D.S. Rawat.
Prices for 3 BHK, 2 BHK and single-room flats have seen a correction by 30 per cent in Noida, 25 per cent in Gurgaon and 15 per cent in some key areas of Delhi, yet the demand stays subdued, the survey found.
"The resale or secondary market is also dull this festival season, marked by drop of at least 20-25 per cent in prices this festival season," Assocham said.
The unsold inventory pressure in NCR is the highest in comparison to other cities.
"The region's residential market still has an estimated 170,000 units of unsold inventory, which is approximately 30 per cent of the units under construction," the chamber said.
Property analysts have predicted that till March next year, the demand for plots, houses and flats may drop by at least 15-20 per cent, it added.