Happy days are here again for Indian realty market, says report
Is the Indian housing market and real estate finally looking up? A new study says the sale of flats and villas across the country have gone up by nearly 20 per cent, the first time in almost three years.
The comprehensive study done across nine out of India’s ten biggest property markets (Delhi city was left out) by Proptiger.com say that the number of unsold inventory, marketspeak for flats and villas by developers that were not sold have started showing a steady decline. After years of slump following the economic slowdown, Real Estate Regulation Act (RERA), demonetization and GST, confidence in the property market finally seems to be looking up.
The study titled ‘Realty Decoded Report’ for the second quarter of financial year 2018-’19 says that there is a definite reduction in the number of unsold inventory, indicative that the public had started buying property again. While it was already up by 5 per cent in the months April to June, it has increased by as much as 20 per cent in the quarter ending last month (July to September). And with the festive season having just started this quarter leading up to Diwali and New Year, the traditional period which is considered auspicious for buying new homes, many expect the sales to only grow further.
In the study, the decline in unsold inventory is seen in almost all the major real estate boom towns, with the highest in the national capital’s Noida-Greater Noida-Yamuna Expressway belt at 20 per cent, while the IT-Corporate-MNC powerhouses Chennai, Bengaluru and Gurgaon (Gurgaon, comprising its upcoming suburbs of Sohna Road and Bhiwadi) are close behind.
The only city where the number of unsold properties show an increase is Kolkata, though it is miniscule at less than one per cent.
The study says that the change was majorly due to the reduction in the number of new launches, as also increase in sales, which was higher by 24 per cent over last year’s. Launch of new property developments decreased by 35 per cent during the same period.
There is also a North-South divide. Launch of new flats and villas increased in all the three major South Indian cities while it plummeted in erstwhile boom towns like Gurgaon. It went up by a whopping 159 per cent in Chennai and 139 per cent in Hyderabad, while it showed a decline in Gurgaon as well as in Mumbai. Sales of existing flats were also the lowest in Gurgaon, while ironically it showed an increase as high as 59 per cent on the other side of Delhi in the Noida-Greater Noida-Yamuna Expressway area, which has more affordable units compared to Gurgaon’s portfolio of luxury condominiums and premium western-style townships.
But overall, the property market seems to be looking up after a long slump according to the report. “Though prices are still stagnant, reduction in inventory will reduce stress amongst developers and will give them headroom to raise prices in the coming quarters,” argues Ankur Dhawan, chief investment officer of Proptiger.