The stock of unsold houses however fell marginally 1 per cent to 4,53,592 units in Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru and Chennai from 4,59,067 units in the previous quarter, said PropEquity, a real estate data, research and analytics firm.
"Housing demand crashed across top eight cities in the fourth quarter of 2016 post demonetisation of Rs 500 and Rs 1000 currency notes," it said in a release.
Sales stood at 26,718 units during October-December, down 31 per cent from 38,450 units in the previous quarter. Similarly, the launches of new homes dropped to 16,636 units from 27,696 units.
"Housing demand (absorption) across key cities declined by 31 per cent largely on uncertainty post demonetisation which led to very few transactions materialising in both primary and secondary market," the company said.
Home launches fell as developers were waiting to gauge the true extent of demonetisation impact on real estate before launching any new projects, it added.
"Real estate sector in India, especially housing is going through a critical transition phase post-demonetisation as transaction activity has slowed down considerably," said Samir Jasuja, founder and CEO at PropEquity.
The average prices of unsold units almost remain stagnant at Rs 6,683 per square feet as buyers and sellers delayed their decisions.
"Going ahead, the recent budgetary announcement to grant industry status to affordable housing will surely provide ample push for this segment in India, a key initiative under Housing for All. Developers having projects in the affordable segment will benefit greatly with this announcement," the report noted.