Sales volume of 25 listed real estate firms have dropped by almost half to nearly 12 million sq ft during the quarter ended December against the year-ago period due to slowdown in demand and high interest rates, according to global property consultant Knight Frank.
The report also pointed out that construction activities have "log jammed" across India on liquidity crunch due to delay in approvals, high cost of funds and low demand.
Despite a fall in sales volume, Knight Frank said, "The residential property prices across major cities have witnessed a double digit growth rate during fourth quarter of FY 2012- third quarter of FY 2014".
Commenting on the report, Knight Frank India chief economist and director research Samantak Das said: "Sales volume of 25 listed companies have almost halved due to poor sentiment, slow economic growth and high interest rates."
Sales volume stood at 11.8 million sq ft during October- December quarter of 2013-14 fiscal as compared to 20.73 million sq ft in the year-ago period.
On regional basis, the maximum fall is in in North India.
"Northern Indian is represented by seven companies in the set of 25 real estate companies and has plummeted the maximum sales volume to 57 per cent on a Y-o-Y basis in third quarter of FY 2014," the survey said.
Housing prices in the northern region have increased by 21 per cent during the last eight quarters.
Sales volumes in the Western India declined by 36 per cent during October-December quarter of 2013-14 fiscal compared to same period of previous year.
"Unaffordable prices and execution risk brought sales literally to a grinding halt in Western India. Average residential prices in the western region have increased by 16-17 per cent during the last eight quarters," it added.
However, sales in southern India increased by 4 per cent to the tune of 3.92 million square feet in Oct-Dec quarter of current fiscal against 3.76 million square feet in the same period last year.
"Affordable prices, an end-user driven market and comparatively less leveraged balance sheets led to a relatively better performance by developers based in South India," survey said.
Knight Frank report is based on sales figures of 25 listed companies, out of which seven are from North, 13 from West and 5 from South.
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