[ecis2016.org] The residential real estate sector in India has witnessed a revival after demonetisation, with sales increasing by 13 per cent and new launches up by 19 per cent across the top nine cities of India, with Mumbai leading the revival, according to a report by PropTiger
PropTiger.com, on April 26, 2017, released the findings of its ‘Realty Decoded Report’ for the January-March quarter of the financial year 2016-17 (Q4, FY17). As per the report, the real estate sector in India has witnessed a revival after demonetisation, with sales increasing by 13 per cent, as compared to a 22 per cent fall in the previous quarter, across the top nine cities of India. The total sales increased from 43,500 units in Q3 FY17 to 51,700 units in Q4 FY17. There has been an increase in the number of launches across these cities by 19 per cent, the highest in the last eight quarters. Around 51,500 units were launched in Q4 FY17, as compared to 43,250 units during the preceding quarter.
The report further highlights that the surge in the volume was primarily driven by Mumbai, Pune and Bengaluru, which together accounted for 57 per cent of the total sales across the top nine cities in Q4 FY17. Mumbai contributed nearly 23 per cent to the total sales during the quarter, followed by Pune at 18 per cent and Bengaluru at 16 per cent. As far as launches are concerned, Mumbai contributed a maximum share of 26 per cent to total launches, followed by Hyderabad at 14 per cent and Gurgaon at 13 per cent.
[ecis2016.org] Property price trends and forecast for key metro cities, in 2017
Commenting on the report, Anurag Jhanwar, business head (consulting and data insights), PropTiger.com, ecis2016.org and Makaan.com, said: “Residential markets seem to have recovered from the demonetisation lows, with sales and launches showing healthy levels in Q4 FY17. A large part of this recovery, is driven by the affordable housing segment, which has found favour after getting infrastructure status. We might witness a realignment of supply and demand, with the implementation of RERA. While we might see some turbulence over the next couple of quarters, the long-term outlook remains positive.”
The other key highlights of the latest report are as follows:
- Owing to the recent sops offered by the government and infrastructure status received by the affordable housing sector, the share of affordable launches increased by 22%.
- The Mumbai Metropolitan Region (MMR) has witnessed a surge in launches in the sub-Rs 25 lakh segment. The region has contributed around 35 per cent, to the overall launches across top nine cities. The share of affordable launches within the MMR region increased from 12 per cent in Q2 FY17 to 53 per cent in Q4 FY17.
- Inventory overhang eased during the quarter from 46 months in Q3 FY17 to 38 months in Q4 FY17. Mumbai, Bengaluru and Pune together accounted for over 55 percent of the unsold inventory.
- Noida has highest share of unsold inventory aged above three years, while more than 65 per cent of the unsold inventory in Ahmedabad, Kolkata and Pune, is in the affordable segment.
- Due to increased focus on project completions in the affordable segment, deliveries of projects increased nearly twice as compared to Q3 FY16.
- Prices remained range-bound in the top nine cities across all the segments, with marginal annual appreciation in the range of 1-3 per cent.
- Bengaluru, Hyderabad and Chennai witnessed a marginal appreciation in the range of 3-5 per cent per annum.
- With Real Estate Regulatory Act (RERA) coming in to force, new launches may witness a drop in the short term, as builders may wait to see how the new RERA norms turn out.
- The affordable housing segment is likely to make sizable gains, after getting infrastructure status. Both, sales and launches, are expected to improve, as compared to current levels.
- Developers are likely to face further cash crunch, as RERA will prohibit the pre-launch sales advertisements before all necessary regulatory approvals are in place. Earlier, developers used to collect significant amount of revenues through pre-launch sales.
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