How India’s Key Property Markets Fared In 2018?
India’s real estate ended the year 2018 on a positive note, with 23 per cent increase in home sales number annually. As we enter the New Year, it only hopes for better. To make that happen, the country’s key real estate markets will have to make a collective effort to help the sector march towards a complete recovery after going through a slump spanning about half a decade. While the year 2018 was a mixed bag with some key markets doing better than others and some still struggling to make a comeback, we may see individual performers scoring better in 2019.
Ahmedabad: This centre of economic activity in Gujarat might have been impervious to a slump that engulfed its peers for a long time, but realtors in Ahmedabad are now under tremendous pressure. Data available with PropTiger.com show Ahmedabad has the biggest inventory overhang among the nine key markets. At the current sales velocity, it would take 47 months to sell the existing housing stock in the city. A dysfunctional online development permission system (ODPS) added to realtors’ woes in the city, with new launches declining substantially on that account. At the same time, rates of property in this affordable market have increased five per cent annually, leading to a decline in sales numbers. The New Year for Ahmedabad would thus be about making corrections.
Bengaluru: Despite being a comparatively expensive market, India’s information capital ended the year with new launches, homes sales and prices all rising, data show. Unsold housing stock in the city is also at its lowest levels in three years, data show. Amid a rise in launch numbers, over 42,000 new units were delivered in this year till September. To keep the momentum going, developers must focus on serving diligently what buyers want in 2019. Numbers show, they definitely want affordability in a market where rates have been increasing slowly but surely.
Chennai: Chennai growth story has been quite similar to that of its peer in Karnataka. While witnessing an increase in home sales and new launches, the Tamil Nadu capital saw inventory overhang at its lowest level in the past three years in the September quarter. Amid stability in rates, developers are seen launching affordable projects largely. In 2019, Chennai realty would march towards greater stability while a rise in prices can be on the cards.
Gurgaon: The Millennium City was among the markets where home sales in the September quarter declined while most cities saw a turn of luck on that front. In this expensive property market, where stuck infrastructure projects are slowing down the process of recovery, a reversal in luck is likely only by next year, data available with PropTiger.com indicate. The completion of the Southern Peripheral Road, which will connect the Golf Course Road with the National Highway 8, could act as a panacea for the micro property markets in the city.
Hyderabad: This property is market is different from any other in the sense that its love for luxury real estate has not faded away while the noise around affordability grows louder in other markets. For reasons obvious to real estate trend watchers, rates of property in most key markets have undergone correction in the past three years. Hyderabad alone has remained an exception to that rule. Property prices in the City of Nizams increased 22 per cent in the past three years. Interestingly, a rise in sales had only little impact on sales or launches for that matter, resulting in inventory overhang thinning significantly. Hyderabad has the lowest inventory overhang— it would take only 22 months for real estate developers in Hyderabad to sell off the existing housing stock in the city, the lowest for any city, at the current sales velocity. We expect this market to continue this momentum in 2019, too.
Kolkata: After a prolonged lull, Kolkata realty saw some stirring in the second quarter, with sales increasing six per cent annually. New launch numbers also increased in Kolkata amid inventory overhand touching its lowest level in three years during the period. A discontent that ensues between the state and the Centre after the West Bengal government launched its own version of the real estate law might, however, act as an impediment in the city marches towards recovery.
Mumbai: Mumbai might be among the most expensive property markets in the world, but is hardly any deterrent for property seekers in the city. Resultantly, home sales in the Mumbai Metropolitan Region have been consistently increasing. A pro-active Real Estate Regulatory Authority has been quick in identifying and resolving buyers’ issues. That factor will further strengthen the Mumbai real estate in 2019. However, realtors in the city are still struggling with high inventory stock. They will have to find innovative ways to offload that burden.
Noida: Several big developers might be battling hard times in Noida, but this has not stopped this property market from springing back to normalcy, thanks to the affordability factor. Home sales increased 59 per cent in Noida in the second quarter amid a decline in sales as well as inventory overhang. At the current sales velocity, it would take 32 months to sell the existing stock in Noida, as compared to 63 months in Q2 FY18. The city’s performance in future would depend on how effectively developers in the region are able to deal with the negativity that looms over this key market due to several developers filing going insolvent.
Pune: Pune realty is quite similar to that of Mumbai, except the affordable housing segment here rules the roost. Home sales in the city have been consistently increasing while developers have been keen on launching projects in the Rs 25-50 lakh price bracket to meet the demand. Further improvement is likely in the market in the New Year.