Home Sales Fall 11% in Q1 FY20: PropTiger.com Report
Indian realty developers continue to struggle with hard times as home sales refuse to pick up, despite several nation-wide corrective measures launched by authorities as well as the builder community.
According to Real Insight, a quarterly report by PropTiger.com that analyses real estate data in nine major Indian markets, home sales declined by 11 per cent in Q1 FY20 when compared to a year-ago period. During this quarter ending June, new project launches also reduced by a drastic 47 per cent year-on-year (YoY), points the report. The decline in launch numbers could be attributed to a cautious approach by the developer community in an election year.
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Battling Falling Sales, Some Buck the Trend
When compared to 80,628 units in Q1 FY19, only 71,957 units were sold in Q1 FY20, a fall of nearly 11 per cent. Some cities that bucked this trend during the quarter include Gurugram, Hyderabad, Kolkata and Pune. The sharpest increase in sales was seen in the millennium city of Gurugram, where 4,951 units were sold in Q1 FY20 as against 3,737 units in Q1 FY19, an increase of 32 per cent.
Reduced Launches to Stay For a While
As against 71,970 units in Q1 FY19, only 37,852 housing units were launched in Q1 FY20, resulting in a fall of 47 per cent. Barring Gurugram, where new launches more than doubled – from 2,588 units to 5,945 units – new launches fell across the various other cities during this period.
The severe liquidity crunch and harsh market conditions have forced realtors to exercise extreme caution with new launches, in order to survive. This pattern may continue going forward too.
Inventory overhang reduces
In a relief of sorts, the report mentions a decline in inventory stock of these nine major cities by over 12 per cent between April and June, 2019.Developers are sitting on an inventory stock consisting of 7,97,623 units in Q1 FY20 as against 9,09,324 units in Q1 FY19. Also, inventory overhang reduced to 30 months —i.e. at the current sales velocity, developers would take less than three years to sell the existing housing stock.
Affordable Housing Still Rules
A total of 1,20,500 units were delivered by realtors in the first three months of FY20, the report mentions. Another 5,00,000 units are likely to be delivered by March 2020, it adds. Affordable housing would continue to rule both, demand and supply, in the quarters to come, the report indicates.
Prices Largely Unmoved
Barring Hyderabad where property prices increased at an impressive pace of 17 per cent in the past one year, prices remained largely flat in other markets. Except for Gurugram, there was a marginal increase in rates in other markets in the past one year.
Note: The cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.