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Housing sales in eight cities grew 6% in 2018

TESTING TIMES: Markets would remain cautious this year due to elections and NBFC woes

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Reduced prices and indirect discounts by developers led to 6% growth in housing sales across eight major cities of the country in 2018, according to a report by Knight Frank India released on Tuesday.

Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad and Ahmedabad are the six cities were the residential unit sales went up. However, two cities- Kolkata and Pune saw a decline. Infusion of residential products in tune with homebuyers and improved regulatory environment led to the growth, the report further stated.

"The residential market in 2018 recorded a recovery after seven years, which has been led by the affordable segment. The incentives from the government such as lower GST rates and infrastructure status to affordable housing have fuelled the demand in the sector," said Shishir Baijal, CMD of Knight Frank India.

The volume of sales in the above mentioned eight cities stood at around 242,328 units in 2018, as against 228,078 units registered a year before. Due to the higher sales volume, the number of unsold units saw a drop by 11% to nearly 4.7 lakh units in these cities.

The highest annual increase in sales took place in Bengaluru by 27% (YoY). Delhi-NCR also saw sales improve by 8% on the back of stronger sales traction in Noida and Greater Noida in 2018. However, sales declined in Kolkata and Pune by 10% and 1% respectively in 2018

Meanwhile, the launches of new homes rose sharply by 76% to 1,82,207 units in the eight cities covered in the report. The total unsold inventory levels have improved at the end of 2018 and are estimated to be 4,68,372 units.

Baijal further said that the non-banking financial companies' (NBFC) crisis created a liquidity crunch in the second half of 2018, which restricted sales, particularly in Mumbai and Delhi-NCR in the second half of 2018. The markets would remain cautious due to the upcoming general elections and the after-effects of NBFC crisis through most of the first half of 2019 and the anticipated downward revision of GST on under-construction houses should provide a boost to buyer sentiment.

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