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Construction World Magazine India | New Home launches pan-India drops 12 per cent in Q4
New Home launches pan-India drops 12 per cent in Q4
Housing for All and PMAY to get boost with reduction in GST under CLSS
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Unsold Stock declined slightly due to lack of new launches
Unsold inventory dips by 3 per cent
Market to further improve in Q1
In a report released by PropEquity, it said that new home launches dipped 12 per cent across the top nine cities in the fourth quarter of 2017 from 15,593 units to 13,666 units.
Lack of new launches was majorly attributed due to developers focussing on compliances with RERA and implementation of GST.
Also, as a measure of the slowdown in the real estate prices stabilising, capital values including resale saw negligible correction, if any.
Weighted average prices in the quarter remained at similar levels to Rs 6,634 per sq ft from Rs 6,639 per sq ft, indicating bottoming out of correction.
“2018 should hold as a stabilisation year for the sector since now both, developers and buyers are more attuned to this changed regulatory scenario. The implementation of RERA is encouraging developers to focus on the completion of existing projects. Consumer sentiment too, has greatly improved,” said
Samir Jasuja, Founder and CEO, PropEquity.
The unsold inventory dipped by 3 per cent to 586,446 units from 605,323 units due to lower new launches and developers focussing on clearing their existing unsold inventories which is at the finishing stage.
Housing demand (absorption) across key cities dropped by just 9 per cent to 32,546 units from 35,944 units due to fewer new projects in the market and end-users showing signs of buying rightly priced projects.
Nine cities were included for the study including Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru, Thane and Chennai.
The city gained some momentum in Q4 after GST and RERA were introduced in the previous quarter as approx. 1,300 units were launched during the period.
During Q3 2017, no new projects were launched as developers in this region were cautious due to RERA and GST compliance and were looking to clear existing inventories.
New supply is expected to stay low for at least six months as RERA and GST will lead to implementation and compliance challenges.
Absorption witnessed a considerable change on QoQ basis and was increased by 8 per cent showing trends of uptick in demand.
Prices were at Rs 6,071 per sq ft as available units comprised primarily of mid and premium segments.
Golf course road extension and New Gurgaon witnessed momentum in terms of absorption. Demand was mostly witnessed in the luxury segment (71 per cent) followed by mid-segment and affordable segment at 27 per cent and 2 per cent respectively.
Going ahead, with prices down by 4 per cent on YoY basis, the city is likely to witness more demand in the future.
In Noida, only one project was launched in Q3 2017, which was catered to the affordable segment.
Absorption increased on QoQ (6 per cent) and decreased on YoY (54 per cent) basis. Weighted Average Price stood at Rs 5,431 per sq ft, which indicates that the majority of the unsold units are in the mid segment.
Unsold stock in Q4 witnessed no change on QoQ but decreased by 11 per cent on YoY basis.
Going ahead, prices are unlikely to go down further as corrections were already witnessed post demonetisation.
New launches witnessed noticeable drop on both QoQ (25 per cent) and YoY (70 per cent) basis.
Absorption too witnessed a considerable fall since they declined by 23 per cent (QoQ) and by 39 per cent (YoY). These numbers of lesser new launches and absorptions point out that both supply and demand have been hit for the city.
Demand was considerably high in Kandivali (W), Mulund (W) and Andheri (E), with these micro markets having the highest absorption numbers. Luxury segment was the most dominated one with a share of 60 per cent.
Being more inclined towards the luxury market, correction in prices may revive the residential sales in future.
Q4 2017 witnessed a considerable decrease in new launch activity as compared to QoQ and YoY basis.
Absorption declined by 14 per cent on QoQ basis and 55 per cent on an YoY basis, indicating that demand has fallen significantly in the city.
Weighted Average Price of absorbed units stood at Rs 3,831 per sq ft, increasing by 3 per cent from the previous quarter. The weighted average price of unsold units stood at Rs 3,478 per sq ft.
The Kolkata residential market has witnessed contraction of new launches. Regions like New Town and Rajarhat maintained their dominance in terms of sales. Most of the new launches in the recent months were witnessed in peripheral locations of the city.
New Launch activity in Q4 2017 witnessed an tremendous increase of more than 100 per cent on QoQ basis but reduced by 70 per cent on YoY basis.
Absorption also witnessed a marginal dip of 8 per cent on QoQ basis and 36 per cent on YoY basis.
Weighted Average Price stood at Rs 3,892 per sq ft, which indicates that the majority of the unsold units are in the affordable and mid segments.
The new launch activity witnessed upward trend during the quarter and is likely to rise in upcoming months. Steady increase in commercial activity in and around Hitech City is most likely to attract housing demand in the North-West region in the secondary market.
Q4 2017 witnessed a considerable decrease in the new launch activity as compared to the previous quarter. On YoY basis also the launches decreased drastically.
Absorption also decreased by 5 per cent and 45 per cent on QoQ and YoY basis respectively.
Weighted Average Price of unsold stocks stood at Rs 4,674 per sq ft, which indicates that the majority of the unsold units are in the mid segment.
Mid segment contributed approx. 67 per cent of the total absorption catering to the higher demand from IT professional of the city followed by luxury with 28 per cent and affordable segment with 6 per cent respectively.
The city will witness completion of approximately 4 million sq ft of commercial space by the next quarter which is likely to create rental driven demand. Consequently, areas like Outer Ring Road, Electronic City and Whitefield may keep the residential market active in terms of sales.
The city in Q4 2017 witnessed an steep decrease of new launch activity by 78 per cent and 93 per cent on QoQ basis and YoY basis respectively.
Absorption also witnessed a substantial drop of 9 per cent and 37 per cent QoQ basis and YoY basis respectively.
Weighted Average Price of available stock stood at Rs 5,089 per sq ft, which indicates that the majority of the unsold units are in the mid segment.
Micromarkets like Bavdhan, Kharadi and Hinjewadi may continue to witness some traction owing to the upcoming commercial space. Demand for rental housing is most likely to increase as approx. 2.1 million sq ft of commercial area is scheduled for delivery in the upcoming quarter of 2018 in South West and North East region.
Minimal launch activity took place in Chennai during Q4 2017. The developers were more cautious about the launching of new projects as all the approvals has to be received and the project has to be registered in RERA website before launch.
Absorption witnessed a sizeable dip of 6 per cent and 54 per cent on QoQ and YoY basis respectively. Weighted Average Price stood at Rs 4,826 per sq ft, which indicates that the majority of the unsold units are in the mid segment.
Buyer’s interest was mostly towards properties that were nearing completion where areas like Perambur, Medawakkam and Pallikaranai witnessed some demand.
Q4 2017 witnessed a steep dip in new launch activity by 76 per cent and 90 per cent on QoQ basis and YoY basis respectively.
Absorption also witnessed a considerable drop of 9 per cent and 31 per cent on QoQ basis and YoY basis respectively.
Weighted Average Price stood at Rs 5,657 per sq ft, which indicates that the majority of the unsold units are in the mid segment.
Demand is considerably high in the region beyond Thane and micro markets such as Dombivali (E) and Badlapur as the majority of the projects in the region falls in the affordable segment. West and East region witnessed considerably lesser absorption.
High unsold inventory and less absorption may refrain the developers from launching new projects; supply may remain at similar levels in the next quarters.
Read the full report here.
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