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South Indian cities feel slowdown pinch; residential sales decline by 5%

MMR & Pune see their sales jump by 33%; NCR sees 15% rise.

Southern cities of Bengaluru, Hyderabad and Chennai are beginning to feel the heat of the residential slowdown with residential sales declining by 5 percent in the first three quarters of 2019 against the corresponding period in 2018, according to a new report.

The western cities of Pune and MMR raced far ahead and clocked in 33 percent jump in sales over the same period. Even NCR in the north recorded 15 percent yearly rise in housing sales between January to September 2019.

The three southern cities collectively saw residential sales of 61,400 units between January and September 2019 as against 64,420 units sold in the first three quarters of 2018. MMR and Pune, on the contrary, saw the sale of nearly 93,930 units in 2019 against 70,740 units in the corresponding period in 2018, said ANAROCK's recent research report.

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Altogether, the top seven cities recorded sales of 2,02,200 units in 2019 till September, of which western cities comprised 46 percent overall share while southern region consisted of 30 percent share.

Individually, housing sales in Bengaluru saw maximum drop of 8 percent this year, followed by Hyderabad which clocked in 4 percent fall. Chennai, on the other hand, saw residential sales rise by 12 percent during the January to September period in 2019. Bengaluru saw housing sales of 39,250 units, Hyderabad recorded sale of 13,110 units while Chennai clocked in sale of 9,040 units in 2019.

In the western region, housing supply in MMR recorded a 35 percent jump in first three quarters of 2019 versus the same period last year. Nearly 62,550 units were sold this year. Pune witnessed 28 percent rise in sales – from 24,520 units in 2018 to nearly 31,380 units in 2019.

In terms of new supply, both Chennai and Hyderabad recorded yearly drop of 19 percent and 17 percent respectively with former seeing new supply of nearly 9,580 units and the latter approximately 11,050 new units in 2019. Contrary to this, Bengaluru saw its new supply rise by 27 percent in the three quarters of 2019 and stood at 29,440 units, the research said.

In west India, Pune saw a whopping 106 percent jump in new residential launches this year – from 17,700 units in Q1, Q2 and Q3 of 2018 to 36,540 units in the corresponding period in 2019. Meanwhile, MMR saw its launches jump up to 63,930 units in 2019 from 43,340 units the previous year, increasing by 48 percent on y-o-y basis.

Concurrently, new launches in the southern cities were also restricted this year and witnessed a mere 3 percent yearly growth – from 48,410 units in first 3 quarters of 2018 to 50,070 units this year.

The western markets of MMR and Pune, on the other hand, saw a significant 65 percent growth in new supply in a year - from 61,040 units in 2018 to over 1,00,470 units in 2019 (more than double the new supply in the main southern cities).

In NCR, new launches rose by 59 percent in a year from 17,230 units in 2018 to 27,390 units this year.

Unsold inventory declines by 11 percent in southern cities

Amidst declining residential sales and restricted new supply, the southern cities shed unsold stock by 11 percent during the same period, while their western counterparts largely maintained status quo. As on the third quarter of 2019, the southern cities have a combined unsold stock of nearly 1.19 lakh units, which was over 1.34 lakh units in 2018.

MMR and Pune, meanwhile, currently have nearly 3.13 lakh unsold units - almost the same as last year. This was largely due to the ample new supply added in the market during this year.

Among the three southern cities, Bengaluru witnessed maximum yearly decline of unsold inventory at 17 percent - the highest among all top 7 cities. The overall unsold stock in the city as on the third quarter of 2019 is 63,540 units. Hyderabad has the least unsold stock among all top 7 cities in the country at about 23,890 units which declined by 12 percent against the third quarter of 2018. Meanwhile, Chennai saw its unsold stock increase by 4 percent in a year and currently has approximately 31,380 unsold units.

Pune and MMR saw no major difference in their stock of unsold units. In fact, Pune saw its unsold inventory increase by 2 percent in a year – from 90,610 units in first three quarters of 2018 to nearly 92,560 units in corresponding period of 2019. MMR saw mere 1 percent reduction during the same period.

MMR has the maximum unsold stock among the top cities at approximately 2.21 lakh units as on the third quarter of 2019.

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First Published on Oct 16, 2019 02:08 pm
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