Realty In 2017: Home Sales Dropped 17%, New Launches Fell 43%

Nobody thought it was going to be easy in the short term for India's real estate sector to bear the combined impact of a note ban, the arrival of a sector-specific law and a tax regime that promises uniformity of rates, the long-term benefits of these measures/laws notwithstanding. Data show new launches as well as homes sales have gone down significantly in the year gone by.

The major effect on launches

According to a recent report by PropTiger DataLabs, these “temporary setbacks” led to total new launches in top nine cities of the country dropping 43 per cent in Calendar Year (CY) 2017 when compared to CY2016.

The nine cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune.

Millennium City Gurgaon was the only city that bucked the trend and registered a 55 per cent increase in the new-launches segment during that period. The biggest fall in new launches was seen in Pune (62%), Bengaluru (62%) and Ahmedabad (61%). When compared to the national average and its other peers, financial capital Mumbai recorded a less significant fall in new launches, at 20 per cent.

Source: Proptiger DataLabs

Notes: * Noida includes Greater Noida and Yamuna Expressway.

** Mumbai includes Navi Mumbai and Thane.

^ Gurugram includes Bhiwadi, Dharuhera and Sohna.

Analysis includes apartments and villas across the regions

The cascading effect on sales

With new launches taking a significant hit, sales numbers also went down 17 per cent in 2017. “Thirty-two per cent of sales in 2016 was contributed by projects launched in 2016 itself. This ratio came down to 24 per cent in 2017,” the report says.

Ahmedabad (33%), Pune (32%) and Noida (30%) recorded the biggest fall in home sales last year. Chennai (3%) and Mumbai (10%), on the other hand, registered the lowest decline in sales. The fall in Kolkata (15%) was also below the national average.

In terms of sales, too, Gurgaon stood out ─home sales in the city increased 27 per cent. In Hyderabad also, there was a nominal rise of two per cent in sales in 2017.

A quarter-on-quarter analysis of numbers also shows many cities such as Benagluru, Chennai, Gurgaon, Hyderabad and Noida improved sales in CY2017 Q4 when compared to the same quarter in the previous year.

The positive impact on inventory

The report says “reduction in new launches and sustenance sales” have improved the situation on unsold units, which has come down by seven per cent across cities.

Mumbai, Pune, Bengaluru and Noida are the cities you should be exploring in case you are trying to strike a monetary deal—these cities contribute the most to the combined unsold inventory, with Mumbai leading the pack.