New home sales dip 10% in April-June

Sales of new homes across India (except Noida) have fallen 10% sequentially in the quarter ending June, as per international property consultants Jones Lang LaSalle (JLL), quoted in a recent Morgan Stanley report.

The number of new units sold in the quarter across India (excluding Noida in NCR) was 27,000, down 10% from 30,000 units sold in the quarter ended March 2011, which was up 5.6% compared to 28,400 units sold in quarter ended December 2010. December quarter sales were flat compared to the quarter ended September 2010 during which 28,500 units were sold.

The absorption rate (new sales divided by total unsold inventory) across the country remained 14% in the second quarter against the 17% seen in the first quarter of the calender year (CY) 2011. It was 17% in Q4CY10, down from 20% in Q3CY10, which in turn was down from 21% in Q2CY10.

Market observers say high prices of residential properties are keeping customers away from the market. “Economic growth and pricing has a far greater impact on demand than mortgage rates since 90% is a floating rate which gets normalised over 15 years of loan tenure,” says the report. 

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