The return of end users in certain micro markets of residential real estate and the disappearance of speculators is making the markets in top 7 cities healthier despite the fall in sales.
Total sales figures in markets of Mumbai, NCR, Bengaluru, Chennai, Pune and Hyderabad have come down to 2.02 lakh units as against around 3 lakh apartments three years ago. Even though new launches declined in the first month of this year as compared with the month ago, absorption was on the rise. The absorption of homes across top 7 Indian cities doubled to 500 units in January 2018 from 250 units in December 2017, shows data from ANAROCK Property Consultants.
“The crazy days of massive residential sales seem to be a thing of the past. Today’s buyers are well-informed and prefer to take informed decisions rather than just go with the flow. Structural changes and policy changes such as demonetization, RERA and GST have also helped to bring sanity into the Indian real estate sector,” said Anuj Puri, chairman, ANAROCK Property Consultants. “Investors, who were instrumental in driving up prices in previous years, are no longer a major factor either.”
The drop, according to experts, was necessary to bring the market to rationalized levels and is now witnessing more active participation from end users given the confidence provided by Real Estate (Regulation & Development) Act, 2016. A full-scale recovery still seems few quarters away. However, the availability of ready-to-move in apartments that do not attract GST and are free from any execution risk are attracting buyers who are looking to buy homes for their own use.
With the government doing its bit to push affordable housing, absorption in the price bracket of less than Rs 40 lakh is on the rise. The share of sub-40 lakh apartments in the overall absorption jumped to 45% in the last quarter of 2017 from 39% in the first quarter of 2017, showed the data.
Industry experts believe that residential markets will improve in 2018 as the market is getting healthier by shedding the bulge it had accumulated in the form of investors and speculators, backed by strong economic fundamentals and a firm legal structure in the form of RERA.