In June quarter, new home sales fell in Mumbai, Pune, Chennai and Delhi-National Capital Region but picked up in Bangalore, according to data from property research firm Liases Foras. In spite of attractive home purchase schemes, sales in Delhi-NCR were down 13 per cent from the January-March period, while that in Mumbai, Pune and Chennai were lower by 12 per cent, 15 per cent and 7 per cent, respectively. The worst hit segment was that of luxury homes. However, Bangalore, which witnessed a spurt in NRI demand for homes and new launches in the affordable housing segment, bucked the trend with a 25 per cent rise.    

When markets are down, nothing works as buyer sentiment is extremely low, said Lalit Kumar Jain, Chairman of Confederation of Real Estate Developers Associations of India. A home loan rate cut could be the trigger to get back sales. Liases Foras' data for the April-June period show that property prices have stagnated across the top markets in the country and inventory of unsold homes has touched a new high of 669.95 million sq ft. Experts say such an inventory level could take up to 32 months to be sold.    

With market sluggishness tending to aggravate the funding problem for several developers, and the RBI's liquidity tightening measures this week set to increase borrowing costs, experts say a price cut could be round the corner. According to Ask Group's Managing Director Sunil Rohokale, developers would want to focus on cash flows rather than margins. With sales going down, they are scared their cash flows will not be enough even to cover their loan servicing. We expect a reduction in prices to push sales, he said.