The realty sector witnessed several residential project launches in seven metropolitan cities in the first quarter of 2018, primarily driven by affordable housing and policy measures taken in 2017.
The realty sector witnessed several residential project launches in seven metropolitan cities in the first quarter of 2018, primarily driven by affordable housing and policy measures taken in 2017.
As per the data shared by Anarock Property Consultants, residential unit launches across top seven cities recorded a 27% rise in Q1 as compared to the previous quarter.
Increase in project launches has been due to policy reforms and structural changes introduced by the government. "Developers are intent on making up for the lost ground,” read the report.
The spurt in new launches was also backed by an increase in sales by 12% in the seven cities of National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Bengaluru, Pune, Hyderabad, Chennai and Kolkata, as compared to Q4 of 2017. These cities recorded around 33,300 new unit launches in Q1 as against 26,300 units in Q4 2017.
“Key cities contributing to Q1 new unit launches, included MMR, Bengaluru and Kolkata, altogether accounting for 66% of addition. While in Kolkata 6,500 units were launched, which is a massive rise of over 300% as compared to Q4 2017. A large affordable housing project of around 3,500 units was a key contributor to the rise in new units hitting the market in the quarter,” stated the report.
“In terms of sales during Q1 2018, almost all the cities recorded a rise over the previous quarter - except Chennai, which recorded a 12% decrease,” says Anuj Puri. “The overall quarterly increase of 12% in sales is a good indicator of reviving demand.”
On the sales front, around 49,200 units were sold in Q1, with NCR, MMR, Bengaluru and Pune together accounting for 80% of the sales.
All the cities witnessed an increase in sales except Hyderabad where it was almost stagnant over the previous quarter, with 3,800 units sold in Q1 and Chennai recording a dip in sales by 12% - from 2,600 units in Q4 2017 to 2,300 units in Q1.
Most micro-markets across key cities also have been experiencing stable capital values over the last few quarters, which makes markets conducive, according to another real estate consultancy JLL India. The appreciation in capital values has remained in the range of 0-2% in 2017 over the previous year for most micro markets across India, especially the suburban and peripheral markets.
Talking about the Mumbai’s realty market, Sarojini Ahuja, vice president sales & marketing, Transcon Developers, said, “Despite the slowdown in the realty market post budget, Mumbai’s western corridor projects have been the major focus for residential development and have emerged as a hot favourite among developers and buyers alike. With good sales observed and with a plethora of newly launched and upcoming projects available at affordable rates than ever.”
“With RERA implemented in most states, entering the residential market at this time will be a good decision given that the investment is legally protected and pricing is right,” said Ashutosh Limaye, head research and REIS, JLL India.
Kanakia Group's managing director Himanshu Kanakia agreeing with Limaye told DNA Money that, "The year 2017 had witnessed a series of policy reforms and structural changes which eventually brought in transparency and has changed the way Indian real estate business is conducted. This has been a boon for the industry. The new launches have been happening in real estate post-RERA as the demonetization effect has stabilised. However, branded developers who are in the league since years have seen a spike in sales throughout 2017-18 due to various factors like their commitment towards timely delivery, their unique offerings of amenities and lifestyle, the project location and other payment offerings.”
Even as sales are picking up, Anuj Puri, chairman of Anarock Property Consultants, is of the opinion that the sector is still not out of the woods. “We are now seeing some green shoots of recovery. The market has turned end-user friendly and 2018 is bringing new launches that match demand. The days of product mismatch are on their way out.”
“We as a developer launched over 4-5 projects since May 2017, and have succeeded in selling more than 90% of inventory in all the projects. Mumbai market has seen launches catering to the demand for compact 1, 2 and 3 BHK apartments with increasing influx of people in the city looking for compact homes suiting their budgets,” said Devang Varma, director, Omkar Realtors & Developers.
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