[ecis2016.org] Multiple policy changes, such as demonetisation, RERA and the GST have forced new launches to their lowest in the last 12 quarters but the positive sentiments resulted in a three per cent increase in sales, according to a report by PropTiger
PropTiger.com, on July 27, 2017, released the findings of ‘Realty Decoded’ report for the April- June quarter of the financial year 2017-18 (Q1, FY18). As per the report, residential sales in the real estate sector continued to gain momentum, witnessing an increase of three per cent over the previous quarter.
You are reading: Residential sales up by 3% in Q1 FY18: PropTiger’s Realty Decoded report
The total units sold in Q1 FY18 stood at 53,352, across the nine cities (Mumbai, Pune, Noida, Gurugram, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad) covered in the study. Despite the multiple policy changes, such as demonetisation, RERA and GST, the sales in Q1 FY18 was only lower by four per cent, compared to the Q1 FY17 sales of 55,500 units. There was a 38 per cent growth in sales velocity, compared to last quarter, in projects that were launched 7-12 months ago.
The report further highlighted that Mumbai and Pune, maintained a lion’s share, with 23 per cent and 18 per cent of total absorption, respectively, as RERA allowed sales even without registration for three months. The policy, in fact, contributed in strengthening customer confidence in the sector, thus, ensuring strong shares for Mumbai and Pune.
City Name | Launched units | Absorption | ||
Q1 FY17 | Q1 FY18 | Q1 FY17 | Q1 FY18 | |
Ahmedabad | 4,312 | 1,842 | 3,845 | 3,765 |
Bengaluru | 6,461 | 2,832 | 10,352 | 7,994 |
Chennai | 3,639 | 2,146 | 3,763 | 5,024 |
Gurugram | 2,014 | 4,174 | 2,908 | 2,802 |
Hyderabad | 2,921 | 3,852 | 3,318 | 5,153 |
Kolkata | 1,384 | 1,921 | 2,795 | 3,326 |
Mumbai | 12,020 | 8,962 | 12,693 | 12,268 |
Noida | 1,759 | 876 | 5,202 | 3,565 |
Pune | 6,803 | 3,001 | 10,624 | 9,455 |
Total | 41,313 | 29,606 | 55,500 | 53,352 |
Read also : Can a tenant be evicted for non-payment of rent during COVID-19?
Source: PropTiger DataLabs Jun’17 (Data for apartments and villas)
According to the study, new launches in the sector reduced by 43 per cent in Q1 FY18 (lowest in the last 12 quarters), with 29,606 units, against 51,521 units in Q4 FY17 (January-March). However, if we compare this against same quarter last year, the drop is only 28 per cent. This could be attributed to the stricter norms under RERA. The reduction in new launches, further pushed developers to offer aggressive deals for existing projects which brought down the inventory overhang by five per cent.
[ecis2016.org] Residential sales up by 13%, launches by 19% in Q4 FY17: PropTiger’s Realty Decoded report
Property prices, however, remained stable, with a marginal increase of one per cent, as developers were awaiting clarity on the impact of GST on the sector and hesitated to increase prices. Except Hyderabad and Bengaluru, all other cities had witnessed price stagnation, for the last three years.
Read also : ARHC in Gujarat may boost educational, industrial corridors
Weighted average^^ BSP (Rs per sq ft) of apartment units as at the end of quarter
City | Q1 FY17 | Q1 FY18 | Price Change (Y-o-Y) |
Ahmedabad | 2,966 | 2,940 | -1% |
Bengaluru | 4,754 | 4,850 | 2% |
Chennai | 4,954 | 5,050 | 2% |
Gurugram^ | 5,464 | 5,334 | -2% |
Hyderabad | 3,890 | 4,060 | 4% |
Kolkata | 3,903 | 3,836 | -2% |
Mumbai** | 8,230 | 8,284 | 1% |
Noida* | 4,046 | 3,932 | -3% |
Pune | 4,897 | 4,730 | -3% |
Note: ^^ Price weighted on number of units supply in respective projects in a city. * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna. Analysis includes apartments across the regions.
Commenting on the report, Ankur Dhawan, chief investment officer, PropTiger.com said “Policy changes in any sector lead to an initial slowdown but long-term growth. With RERA’s implementation in more cities, we might see a further dip in launches in Q2 FY18. Sales will also slow down, as developers will rush to register their projects and arrive at new cost sheets and brochures. However, this dip could be the beginning of a road to recovery, for the real estate sector. With the realignment of demand and supply in a few months, we can expect the sector to see signs of revival in the last quarter, on back of a better regulated space and festive offers by developers.”
The other key highlights of the latest report are as follows:
- Kolkata, Chennai and Hyderabad managed to improve sales numbers over Q1 FY17.
- The share of launches in affordable housing, which was consistently contributing over 60 per cent in last three quarters, saw a dip but still accounted for a substantial 54 per cent.
- Except Gurugram, Kolkata and Hyderabad, all other markets witnessed a decline in launches, compared to the same quarter last year.
- Ahmedabad, Noida and Pune saw more than 50 per cent of units sold in affordable housing.
- Hyderabad (36,458,) Pune (83,801) and Ahmedabad (38,819) have the lowest inventory overhang.
- More than 65 per cent of unsold inventory in Ahmedabad, Kolkata and Pune is in the affordable segment.
Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org
Source: https://ecis2016.org
Category: Lifestyle