Housing Markets Show Signs Of Recovery In Q4; Sales, New Launches Increase 19%
The effect of government's currency-ban move, like Reserve Bank of India Governor Urjit Patel predicted, has been temporary as far as India's real estate is concerned, data show. After registering a decline in the previous quarter, home sales and new project launch numbers witnessed a remarkable increase in the fourth quarter (Q4) of the financial year 2016-2017 (FY17).
According to a PropTiger DataLabs report for the quarter ending March (Q4'17), both home sales and new launches across nine major cities of the country increased 19 per cent on a quarter-on-quarter (QoQ) basis.
The nine cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurgaon (including Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane), Noida (including Greater Noida and Yamuna Expressway) and Pune.
Mumbai: Rise and shine
Real estate market of India's financial capital Mumbai remained the star performers in the March quarter. Not only did the city was responsible for 23 per cent of the overall sales numbers, it was also the biggest contributor to overall new launches, at 26 per cent. Surprisingly, Millennium City Gurgaon, at 13 per cent, also contributed fairly well to overall new launches. This is in contrast with the city's performance in previous quarters.
Getting ready to roll
Delay in project completion seems to be pushing homebuyers to pick safe options. As a result, buyers' inclination continued to be higher towards ready-to-move-in projects. “Around 18 per cent of the sales during the quarter was witnessed in ready-to-move-in projects as compared to nine per cent in the same quarter of the previous year,” the report points out.
The unburdening experience
However, it is the ease of inventory burden that should be cited as the most prominent feature of the March quarter. According to the report, there has been a 16 per cent decline in inventory overhang on a quarterly basis. If it would have taken about 46 months to sell the existing inventory stock in the quarter ending December, it would take only 39 months to do so in March quarter. According to the report, the cities of Mumbai, Bengaluru and Pune together accounted for about 55 per cent of the total inventory stock.
Easy on your pocket
The recovery might have much to do with the fact that there has been hardly any increase in property prices. It is only cities of Bengaluru, Hyderabad and Chennai that witnessed a marginal increase in prices, in the range of three to five per cent, the report shows.
After Finance Minister Arun Jaitley decided to accord an industry status to affordable housing while presenting the Union Budget for FY18, developers are seen paying more attention towards the segment. According to the report, share of affordable housing launches in the total numbers has gone up 22 per cent when compared to its share in the fourth quarter of FY16.