Home Sales Seen Rising 25% In 2018; New Launches To Decline By 22%
Home sales are estimated to have increased 25 per cent during 2018 over the previous year, data available with PropTiger.com show. This rise in home sales numbers might mark the start of a new era in India’s real estate after key reforms, including the real estate law and the goods and services tax (GST), were introduced to clean-up the sector beginning 2016.
Data available with PropTiger.com show 3.1 lakh units are likely to be sold across nine major cities of the country by the end of this year, with the affordable housing segment contributing the most to these numbers. The nine cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurgaon, Hyderabad, Kolkata, Noida, Mumbai and Pune.
Cautious developers, however, showed restraint in coming up with new projects - only 1.9 lakh new units were launched in 2018. Consequently, new launches during the year are estimated to have declined by 22 per cent. This has also resulted in a thinning inventory stock. It would now take an estimated 29 months to sell the existing inventory stock lying with real estate developers in these nine cities.
The real estate law, which provides for strict penalties in case of project delays, has been instrumental in improving the completion rate during 2018. When compared to the previous year, there has been a significant rise of 55 per cent in unit completions. Going forward, around 8.78 lakh units are likely to be delivered by the end of 2020, of which nearly 2.5 lakh units are expected to be delivered in Mumbai alone.
In 2019, when the country will go through the general elections, new launch numbers might fall further, with sales either stagnating or seeing only a minor improvement over the year gone by. Developers will focus on selling inventory in existing projects and completing construction during the first half of the coming year.