The risks associated with stalled or delayed housing projects is driving homebuyers to listed real estate developers, leading the top nine listed realtors to record total residential sales of approximately 44 mn sq ft in the financial year 2019 as against 17 million sq ft during the demonetisation period, according to a report by ANAROCK research.
The residential sales value of these realty players in FY2019 was approximately Rs 22, 800 crore, the report said.
Another trend that the report reveals is of top developers recalibrating their project offerings. Their previous hard focus on the premium segments has given way to a greater emphasis on the high-demand affordable and mid-income segments. With more and more listed developers venturing into lower budget segments, the housing market's demand-supply gap has narrowed significantly, the report said.
Many developers who incurred massive debts during the sector's boom period are now looking to reduce their debt burden with rebooted business strategies. They are either selling their assets or their development rights, refinancing loans or speeding up project completions to improve sales, it said.
While many players continue to struggle, the top 9 listed firms collectively reduced their debt burden by 8 percent in the financial year 2019 as against the financial year 2017. The collective debt of these nine listed firms has reduced from Rs 19,123 crore in the financial year 2017 to Rs 17,508 crore as in the financial year 2019.
The top listed developers considered for analysing trends include DLF Ltd., Sobha Ltd., Puravankara Ltd., Prestige Estates, Brigade Enterprises Ltd., Mahindra Lifespace Developers Ltd., Godrej Properties Ltd., Oberoi Realty Ltd. & Kolte Patil developers.
The research revealed that these companies together sold approximately 44 mn sq ft of housing in the financial year 2019 as against approximately 17 mn sq ft in the financial year 2017 (Demonetisation period) and 27 mn sq ft in the financial year 2015. Their sales have collectively grown by 63 percent since the housing market's peak years of the financial year 2015, says the report.
The housing space sold by the nine listed firms in the first quarter of the financial year 2020 (Apr-Jun) was nearly 17.5 mn sq. ft. in a single quarter - slightly less than half of the total space sold in all four quarters of the financial year 2019, the report said.
An analysis of the new launch data trends of these nine listed real estate developers reveals that their new housing supply has more than doubled in two years – from approximately 28 mn sq ft in the financial year 2017 to approximately 61 mn sq ft in the financial year 2019. In the market's peak year of financial year 2015, their new launches amounted to nearly 46 mn sq. ft. This translates into a growth of 33 percent in the financial year of 2019 over the financial year of 2015, the report said.