Sales, new launches increase in first half

The footprint of positivity is slowly increasing in the real estate sector, especially in the first half of 2018. Increase in the number of new launches in the residential segment and big-ticket deals in the office segment bode well for the sector that has been reeling under a prolonged slowdown. The sale of residentail units has registered a 3 per cent increase in eight major cities with 1,24,298 units being sold in the Jan-June period, in spite of fall in prices.  Knight Frank India’s recently released report, India Real Estate, on the performance of residential and office markets in key cities in the country revealed this. According to the report NCR has seen a resurgence in residential launches with 90 per cent YoY growth.  Housing sales in Delhi-NCR increased by 5 per cent to 18,047 units as against the year-ago period. There has been a significant jump of 46 per cent YOY in launches across the country. The unsold inventory level dropped by 17 per cent to 4,97,289 units, according to the report.

Mumbai saw the maximum growth in launches at 128 per cent YoY, while NCR and Pune saw more than 75 per cent growth. However, most of the new launches were concentrated at lower ticket sizes as 51 per cent of the total supply was in the under Rs 5 mn ticket size.

Commenting on the NCR market Mudassir Zaidi, Executive Director - North said, “The supply side is seen to be upbeat largely because of structural reforms like RERA and GST taking shape. This is evident from the fact that many notable developers have launched new projects in the first half of 2018 marking the resurgence of the mid segment ticket bracket. However, a lot of effort needs to be put to re-instill confidence in the buyers who are still wary of the market. ”

According to the report, during this period the average home prices have fallen by around 3 per cent across the eight cities, with Mumbai recording the steepest fall. The drop in prices intensified in Mumbai, Pune and Kolkata at 9 per cent, 8 per cent and 8 per cent, respectively. “Effective price drop of 10-15 per cent continues in cities such as Mumbai, NCR, Pune and Kolkata. Hyderabad bucks the trend with an exceptional price growth at 8 per cent year-on-year,” the report said.  — TNS

Key takeaways 

• Stagnant prices signal price resistance; with stagnancy in price growth, effective price discount reaches to 10-15 per cent
• Share of launches in less than Rs 5 mn bracket reduces to 35 per cent from 81 per cent YoY
• 18,000 units sold in NCR compared to 17,188 units in H1 2017, registering a minor YoY increase of 5 per cent
• Gurugram and Greater Noida account for 67 per cent of the sales in H1 2018.
• In office segment Gurugram outperformed other markets and took up 66 per cent share of the total transaction pie; YoY growth of 28 pc