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Construction World Magazine India | New home launches pan-India dips by 22 per cent in Q2
New home launches pan-India dips by 22 per cent in Q2
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Housing priced largely remained stable
Unsold inventory dips by 2 per cent
According to a report released by PropEquity, India’s leading real estate data, research and analytics firm, new home launches dipped 22 pct across top eight cities in the second quarter of 2017 from 22,762 units to 17,858 units.
Prices increased by 1 per cent to Rs 6,287 PSF from Rs 6,205 PSF as developers were able to finally sell their earlier inventory and focussed on delivering earlier projects before Real Estate Regulator Act kicked in.
However, the unsold inventory dipped slightly by 2 pct to 449,233 units from 462,914 units due to lower new launches and developers focussing on clearing their existing unsold inventories.
During Q2 2017, Cities with significant inventory overhang have seen an improvement in new launches. NCR cities such as Gurgaon and Noida, along with other cities such as Mumbai and Bengaluru exhibit this trend. Southern cities like Hyderabad, Chennai showed dip in new launches irrespective of their inventory overhang.
Housing demand (absorption) across key cities increased by 2 pct to 31,539 units from 30,920 units.
During Q1 2017, cities with significant inventory overhang have seen negligible new launches. This reflects a clear approach by developers to clear off existing inventory before they launch new projects. All NCR cities, ie, Gurgaon, Noida along with Mumbai and Chennai exhibit this trend.
“Once GST and RERA are completely implemented, both the policies will provide the much needed transparency to the sector and trust among the buyers. These would collectively boost the market. Supply is expected to stay low for alteast six to nine months as both RERA and GST will lead to implementation and compliance challenges for developers and also the authorities,” says
Samir Jasuja, founder and CEO, PropEquity.
Eight cities were included for the study including Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru and Chennai.
Going ahead, the recent budgetary announcement to grant industry status to affordable housing and allowing banks to invest in Real Estate Investment Trusts (REITs) will have a strong positive impact on overall sentiment in the sector.
During Q2 2017, developers recovered from the stress of demonetisation. The number of launches in this quarter increased to 1,896 units from 227 units in the previous quarter. The increase recorded at 584 per cent of new launches on a Q-to-Q comparison.
The market recovered form the impact caused due to demonetisation with aggressive launches.
Prices remained at the same level at Rs 6,507 PSF.
Like Gurgaon, Noida also saw a jump in new launches as it increased by 122 per cent to 480 units indicating overall positive sentiments to launch new projects.
Market witnessed slight contraction in units absorbed by 3 per cent, when compared with previous quarter. Even though there is slump in the market with lack of buyer’s interest, the average price still remains the same when compared with Q1 2017.
Prices remained same at Rs 5,470 PSF.
Mumbai, the country’s financial capital, witnessed aggression in the new launches and absorption rate. The new launches inclined by 81 per cent with 4,452 units getting launched and the absorption rate increased by 33 per cent with 4,737 units sold.
For the next quarter, it is expected that the market will see an increased supply and demand. With RERA taking its shape, demand for units in newly launched projects might increase.
Prices remained same at Rs 16,150 psf.
Kolkata saw a significant decline (86 per cent) in new launches at 689 units as developers are still waiting for the market to improve.
The unsold stock was recorded at 41,304, 6 per cent less than the previous quarter. This is mainly because of less launches in this quarter.
Situation might continue to stay the same since Kolkata is still suffering from the implications of currency demonetisation.
Prices increased by 1 per cent at Rs 3,785 psf.
During Q2 2017, Hyderabad witnessed a contraction in terms of new launches. It has decreased by 51 per cent with only 1,566 units getting launched. As a result unsold Stock decreased by 5 per cent.
The absorption rate in this quarter slightly increased by 3 per cent with 3,216 units sold when compared with 3,112 units from the previous quarter.
Prices remained same at Rs 3,950 psf.
Bengaluru, the country’s IT hub, is facing an uneven situation with an increase in the number of new launches and a decrease in the number of absorption and unsold inventory.
There in an increase in new launches by 31 per cent with 4,711 units getting launched in Q2 2017. The absorption rate decreased by 4 per cent with only 6,928 units sold in the second quarter of 2017.
Prices fell by 1 per cent at Rs 4,6665 psf.
Pune was severely impacted by the recent slowdown in Q2 as new launches fell by 57 per cent at 2,361 units. Absorption fell by 3 per cent while the prices mostly stagnant.
Unsold stock inventory fell by 6 per cent at 99,899 units.
Prices remained same at Rs 4,623 psf.
Chennai suffered a major setback with a decrease in the number of launches and a decrease in the absorption rate. The launches decreased by 37 per cent and in overall only 1,703 units got launched.
Prices remained same at Rs 5,100 psf.
Real Estate Data
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