New residential launches up nearly 50% in second quarter of 2018

affordable housing

Policy reforms such as Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST) seem to have finally borne fruit. New residential launches have increased almost 50 percent in the second quarter of 2018 over the preceding quarter, especially in the affordable category, according to data provided by ANAROCK Property consultants.

Interestingly, the supply of affordable housing (less than Rs 40 lakh) increased by 100 percent in the second quarter of 2018 over the first quarter and this supply has led the overall growth, the data said.

The top 7 cities (NCR, MMR, Chennai, Bengaluru, Pune, Kolkata, and Hyderabad) witnessed new unit launches of around 50,100 units in the second quarter of 2018 as opposed to 33,400 units in the first quarter of 2018. The major cities contributing to the second quarter of 2018 new unit additions include Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, altogether accounting for 75 percent of the new supply.

Approximately 6,900 units were launched in Pune – a significant rise of 214 percent from the first quarter of 2018. Two large affordable housing projects comprising 1,900 units were the key contributors to the rise in new units hitting the Pune market in the second half, as per the data provided by ANAROCK.

Hyderabad added 5,550 units in the second half of 2018, a massive quarterly increase of 109 percent. The city has garnered prominent visibility on the Indian real estate map with its high livability index vis-à-vis many other cities. Chennai’s new supply doubled to 4,200 units in the second quarter of 2018 compared to only 2,100 units in the first quarter of 2018 - a rise of 100 percent. Over 64 percent new supply was added in the affordable segment.

NCR contributed 17 percent new supply with 8,500 units, an 89 percent increase over the previous quarter. Of this, 54 percent comprised of units in the affordable segment. MMR saw maximum supply with nearly 13,600 units in the second quarter of 2018, a significant increase of 58 percent over the previous quarter. Bengaluru added 8,800 units in the second quarter of 2018, a quarterly increase of 28 percent. This city is maintaining its intelligent approach to changing market dynamics.

Kolkata’s new launches recorded a drop of 61 percent from the previous quarter, with approximately 2,550 units. During the previous quarter, a large affordable housing project of around 3,500 units was a key contributor to the new launch supply. The drop noted in the second quarter of 2018 reflects Kolkata developers’ focus on completing under-construction projects rather than launching new ones.

Sales increased by 24 percent

On the sales front too, housing sales across the top 7 cities of India also rose by 24 percent compared to the first quarter of 2018, indicating that hitherto abstaining home buyers are back on the market. Developers are working hard on clearing unsold inventory with attractive schemes, freebies, and discounts.

In terms of housing sales during the second quarter of 2018, the top 7 cities together witnessed an increase of 24 percent over the previous quarter. Around 60,800 units were sold in the second quarter of 2018 with NCR, MMR, Bengaluru, and Pune together accounting for 81 percent of the overall sales. End-user driven Bengaluru led the pack on the back of re-ignited interest from IT/ITeS professionals reacting to the mitigated job risks and overall favourable economic environment.

Bengaluru saw the highest jump in sales in the second quarter of 2018, with sales increasing by 27 percent from 11,500 units in the first quarter of 2018 to 14,600 units in the second quarter of 2018.

MMR sales rose by 26 percent from 12,050 units in the first quarter of 2018 to 15,200 units in the second quarter of 2018. Sales in Hyderabad increased by 25 percent over the first quarter of 2018 with 4,750 units.

Pune’s sales increased by 24 percent over the previous quarter with 8,400 units

NCR’s sales increased by 23 percent from 9,100 units in the first quarter of 2018 to 11,150 units in the second quarter of 2018 - a significant improvement in market conditions.

Kolkata’s sales increased by 17 percent from 3,420 units in the first quarter of 2018 to 4,000 units in the second quarter of 2018. Chennai’s sales rose by 16 percent - from 2,320 units in the first quarter of 2018 to 2,700 units in the second quarter of 2018.

Unsold inventory

The overall unsold inventory declined by 2 percent from 7.11 lakh units in the first quarter of 2018 to 7.0 lakh units in the second quarter of 2018 (by 10 percent from 7.7 lakh units in the fourth quarter of 2017).

A marginal increase in prices

Residential property prices across the top cities increased by 1 percent in the second quarter of 2018 compared to the previous quarter, barring Chennai and Kolkata (where prices remained stagnant). The ample unsold stock is keeping price growth in check, the data said.