Num­ber of homes sold sur­passes launches

Hindustan Times (Chandigarh) - Estates - - ESTATES - Anuj Puri ht­es­tates@hin­dus­tan­times.com The au­thor is chair­man and coun­try head, JLL In­dia

Peo­ple will al­ways need homes and they’re con­tin­u­ing to do so, but be­cause of the over­sup­ply sit­u­a­tion in the mar­ket, builders are fo­cused more on sell­ing prop­er­ties than launch­ing new ones.

A Pan-In­dia trend that emerged in 2016 was that a higher num­ber of units were sold ev­ery quar­ter (1Q16-3Q16) than new project launches in the same pe­riod. A slow­ing num­ber of new launches helped re­duce the in­ven­tory over­hang. De­mon­eti­sa­tion will re­sult in the fourth quar­ter read­ings be­ing dras­ti­cally dif­fer­ent from the first three quar­ters once the re­sults come in.

Given that old cur­rency notes are no longer valid, home­buy­ers/ in­vestors us­ing un­ac­counted wealth to carry out trans­ac­tions in cash are fac­ing a tough time, and de­vel­op­ers ac­cept­ing cash com­po­nents are fac­ing a higher liq­uid­ity crunch than those ac­cept­ing all pay­ments through cheque/ bank trans­fer. Over­all, it will be in­ter­est­ing to see if 2016 sets a new bench­mark in units launched ver­sus units sold. A record set in 2008 then would be sur­passed.

Cap­i­tal val­ues (CVs) across cities, es­pe­cially in Hy­der­abad, Pune and Ben­galuru, saw gen­tle ap­pre­ci­a­tion in 2016 and this trend is ex­pected to con­tinue in 2017 as the res­i­den­tial mar­kets ma­ture and be­come more en­duser-driven than ever be­fore. Sales’ mo­men­tum con­tin­ued to re­main steady through­out the year. It is likely to pick up from 2H2017 af­ter the dust has set­tled on de­mon­eti­sa­tion, which has made many buyers hold on to their pur­chase de­ci­sions in an­tic­i­pa­tion of some eas­ing in res­i­den­tial CVs.

Even as the in­ven­tory over­hang re­duces, the three big­gest mar­kets in terms of vol­umes of un­sold units (in­clud­ing un­der-con­struc­tion) are NCR, Mum­bai and Ban­ga­lore. By vol­ume, NCR stands 37%, which is more than a third of In­dia’s un­sold (in­clud­ing un­der-con­struc­tion) res­i­den­tial in­ven­tory.

In Mum­bai, the per­cent­age is higher, but if we dis­count the longer time­lines it takes for large projects to com­plete, it would fall un­der 5%. There are many large projects, high­rises, slum re­ha­bil­i­ta­tion and other re­de­vel­op­ment projects that take a longer time to get com­pleted, pro­long­ing the over­all project time­lines in the city. Delhi-NCR is bur­dened with over­sup­ply and dead stock of de­layed and stalled projects.

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