Homebuyers showed greater faith towards ready homes, resulting in inventory levels declining by 12 percent during the quarter.
Poor demand and liquidity concerns resulted in both housing sales declining by 30 percent and new project launches falling by 44% in India’s nine key residential markets between October and December 2019, a new report has said.
Housing sales fell by 30%. As against 91,464 units sold during the quarter last year, only 64,034 homes were sold across the nine markets in Q3 this year, according to a report the report by PropTiger.com.
Sales declined across all these markets, with Bengaluru, popularly known as India's Silicon Valley, registering a 50 per cent fall in sales numbers. Sales in the residential property market fell 13 per cent to 2,63,294 units during the first nine months of this fiscal as against 228,220 units in the corresponding period of the previous year, the report said.
Inventory declines by 12%
As buyers showed greater faith towards ready homes, inventory levels, declined 12 per cent during the quarter. From 8.83 lakh unsold housing units at the end of the same period last year, unsold stock fell to 7.75 lakh in Q3 FY20. Mumbai and Pune together contribute 57 per cent of this unsold stock. Also, half of the units in this stock are affordable homes (units priced below Rs 45 lakh).
At the current sales velocity, builders would take 29 months to sell off the existing stock, the report said.
Launches fall in Kolkata, Gurugram
The NBFC crisis has made borrowing difficult for builders. This has led to developers’ cautious stance towards new project launches.
Only 41,133 units were launched in Q3 FY20 as against 73,226 units in the corresponding period last fiscal, the report shows. New launches fell across markets, with Kolkata and Gurugram seeing the biggest fall, at 79 and 74 per cent, respectively.
Nearly 40 per cent of new launches were concentrated in India’s financial capital Mumbai, data showed.
Affordable housing continued to dominate launches, with 52 per cent units launched in this segment.
When compared to the first nine months (April-December) of the previous financial year, launches declined by 32 per cent during the same period in the current fiscal. While 215,596 units were launched between April and December in the previous year, 145,852 units were launched during the same period this year, the report said.
Prices increase marginally across cities; Hyderabad sees 13% appreciation
Average values of property increased by 13% year-over-year in Hyderabad, the highest increase among all the cities included in the report, while Gurugram and Ahmedabad registered 6% and 5% increase, respectively.
In other cities, prices showed only a nominal increase, between one and three per cent, the report said.
“The various measures launched by the government in the recent past to revive growth in the real estate market seem to have made little impact. Considering real estate is a major contributor to overall GDP, which hit a glacial 4.5 per cent rate of growth in the July-September period, we expect further assistance from the government, which would nudge buyers to invest in real estate.
"In the Union Budget, we expect the minister to announce measures that would result in higher savings for individual taxpayers, some of which would hopefully make its way towards property purchases,” said Dhruv Agarwala, Group CEO, Elara Technologies.A total of 5.33 lakh units were delivered across the nine markets in calendar year 2019, and another 5.45 lakh units are expected to be delivered through the course of calendar year 2020.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.