Residential property sales in the second quarter appreciated 15% year-on-year across India’s top seven markets, driven primarily by the demand for affordable homes. Inquiries regularly ending up in purchases indicate that builders are now offering solutions within reasonable budgets and also sticking to delivery timelines.
Bengaluru, Kolkata, Mumbai Metropolitan Region (MMR) and Pune witnessed more than 20% on-year sales growth in the quarter ended September, although Hyderabad and Chennai posted declines of 3% and 27%, respectively. Sequentially too, sales cumulatively rose 9% in these seven markets, showed data from ANAROCK Property Consultants. Prices remained largely unchanged, except in Kolkata, where they declined 1%.
The sequential growth assumes significance in this quarter as it includes the 15-day shraddh period considered inauspicious for property deals. So, builders also kept new projects on hold for the ensuing festive season.
“There has been a 51% jump in new housing supply and 15% rise in sales from a year-ago period. Buyers and developers alike are pinning their hopes on the ongoing festive season for better deals and increased sales,” said Anuj Puri, chairman, ANAROCK Property Consultants. “Affordable housing continues to keep the momentum going, with nearly 65% increase in supply during the quarter.”
Affordable and mid-income segment housing dominated, with 75% of launches, or 39,300 units, priced under Rs 80 Lakh. The affordable segment alone accounted for a 42% share of the total new launches.
“The market has turned in buyers’ favour. Prospective homebuyers are selective about the projects, and developers in particular, focusing on quality and track record,” said Kamal Khetan, CMD, Sunteck Realty. “The combination of right location, pricing and upgraded amenities is helping in demand conversion.”
The company has managed to sell more than 2,100 apartments in its recent launch, with units priced in the range of Rs 25 lakh to Rs 50 lakh in Sunteck West World at Naigaon, near Mumbai.
The 3% sequential rise in launches also indicates the industry’s focus on completing existing projects, and selling ready-to-move-in apartments rather than launching new units. The rupee’s recent fall against the dollar has also turned out to be a blessing in disguise for residential sales, with non-resident Indians seeking to take advantage of lower prices, discounts and the currency move.
“There has been an increase in interest and enquiries from NRIs, especially from the Middle East region. The value of the dirham has appreciated due to US dollar fluctuation. We are gearing to convert these sales during the upcoming festive season,” said Viswaprathap Desu, senior vice president, sales and marketing, at Brigade Enterprises.
The recent government initiatives such as implementation of the Real Estate (Regulation & Development) Act, 2016, Goods & Services Tax and demonetisation have also improved the transparency in the sector, offering more comfort to NRIs looking to build assets back home. It is mainly the markets in Bengaluru, Chennai, Kochi, Chandigarh, and Pune that attract the NRIs, and also premium projects in Mumbai and Ahmedabad.