Real estate sector in India continued to see a dip in sales in the first quarter with consumers less inclined to buy houses in big cities such as Gurugram, Noida, Mumbai, Kolkata, Hyderabad, Bengaluru, Pune and Chennai.
A new survey by PropEquity has shown that housing sales stood at 28,472 units during the October- December quarter in these eight major cities, which was a decline from the previous quarter's 28,428 units.
"Overall the fall in demand and new launches of residential projects slowed down in the Q1 as impact of demonetisation on the real estate sector tapered down faster than the expectations," PropEquity said.
The number of unsold inventory fell to 4,71,855 units as as developers focused on clearing existing stocks instead of launching new ones.
Housing prices declined by 1.67 per cent to Rs 6,185 per sq ft from Rs 6,290 per sq ft during the period under review.
During the first quarter of 2017, the key residential markets across India witnessed a minimal variation across various market indicators except new launches.
"Housing supply across key cities declined by about 20 per cent largely on account developers anticipating dip in demand post demonetisation coupled with muted investors demand," the report said.
The report added that the housing supply would pick up in coming quarters.
"Real estate sector in India, especially housing is going through a critical transition phase post demonetisation as transaction activity has slowed down," said Samir Jasuja, founder and CEO at PropEquity.
Many buyers, sellers, banks and private equity investors are waiting for the sector to tide over the volatility in the market, he added.
With implementation of real estate regulatory Act (RERA), Jasuja expected that delays in project deliveries would reduce with developers rushing to complete existing projects to avoid penalties.
"We strongly believe that developers with good track record, strong financials and low leverage to external debt are expected to perform better in the current environment," Jasuja said.
(With inputs from PTI)