Biggest drop in housing prices in a decade

Residential real estate prices drop 3% in top cities

Knight Frank report also highlighted that the share of affordable homes among new projects rose from 53 percent in 2016 to 83 percent in 2017 indicating developers' focus towards properties within Rs 50 lakh price bracket. However, the July-December sales figures of these cities in 2017 were still significantly lower than the second half of 2014 and 2015, clearly depicting an underlying declining trend, the report said.

Shishir Baijal, Chairman & Managing Director, Knight Frank India said, "2017 was been packed with uncertainty, volatility and long-term promise of new opportunities".

The Indian property market will continue to face headwinds this year and no hardening of prices is expected, Das said at a press conference. "Compared to sales and launches in 2011, the fall in 2017 is 56% and 86% respectively". In the NCR, it dropped 11 per cent to 1,66,831 units. Freebies from developers ranging from 24-month rent assurance to stamp duty waivers, no floor rise charges and more.

Presenting a comprehensive analysis of residential and office market performance of MMR for the period July-December 2017 (H2 2017), Knight Frank India launched the eighth edition of its half yearly report today. While 3.68 lakh apartments and houses were sold in 2011, only 2.28 lakh units were sold past year.

"By the end of 2017, the residential sector had shrunk to a fraction of its size in less than a decade". That's great news for homebuyers because average asking prices in the Chennai residential real estate market have come down by 3% since 2016.

The stagnation in the market, according to the report, is owing to ambiguity over Real Estate (Regulation and Development) Act and concerns of job security in IT sector. There is no data available to suggest that prices have dropped to this extent of 12-13 per cent as suggested in the report taking into discounting and quoted prices but increased holding and financing costs in addition to increased wages and regulatory costs suggest that this is a bottom and once the unsold stock is down to manageable proportions the prices in fact might increase post this quarter.

Developers, meanwhile, remain cautious with respect to new launches in the wake of mounting unsold inventory.

New launches across the eight key metros of Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad, declined 41 per cent in the second half of 2017 to 40,832 units from 68,702 units in the same period in 2016. Home affordability remains the highest in Mumbai at 7.8 times a family's annual income, compared to 11 times annual income in 2010.

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