According to a PropTiger.com report, the top nine cities of India witnessed residential sales going down by 4% to 53,352 apartments in the quarter ended June, compared to the year ago period. The sales figures are, however, 3% more than the January-March quarter. The study covered nine key Indian cities of Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Mumbai and Pune accounted for 23% and 18% of total absorption, respectively as RERA allowed sales even without registration for 3 months. The policy in fact contributed in strengthening customer confidence in the sector, thus ensuring strong share for Mumbai and Pune. However, property prices remained stable with a marginal increase of 1%, as developers were awaiting clarity on the impact of GST on the sector and hesitated to increase the property price, the report added. With the exception of Hyderabad and Bengaluru, all other cities are seeing price stagnation for last 3 years.
New launches in the sector reduced by 43% sequentially during the quarter ended June. However, when compared on annual basis, the drop is 28%. The slide is probably due to stricter norms under RERA. The reduction in new launches have further pushed developers to offer aggressive deals for existing projects that have brought down inventory overhang by 5%.
“Policy changes in any sector lead to initial slowdown but long term growth. With RERA implementation in more cities, we might see further dip in launches in Q2 FY’18. Sales also will slow down as developers will rush for registering their projects and arriving at new cost sheets and brochures. However, this dip could be the beginning of road to recovery for the real estate sector,” said Ankur Dhawan, Chief Investment Officer, PropTiger.com.
According to Dhawan, with the realignment of demand and supply in few months, the sector is expected to see signs of revival in the last quarter on back of more regulated space and festive offers by developers.
Share of launches in affordable housing, which was consistently contributing over 60% in last 3 quarters saw a dip but still accounted for a substantial 54% during the quarter. Except Gurugram, Kolkata and Hyderabad all other markets witnessed decline in launches over same quarter last year.
Ahmedabad, Noida and Pune saw more than 50% units sold in affordable housing category, while over 65% of unsold inventory in Ahmedabad, Kolkata and Pune is in the affordable segment.