Launches drop by 45%
The first half of 2015 saw a sharp drop of 45% in new launches and 19% fall in sales volumes across the country. Situation likely to improve by the latter part of this year as there will be a ‘slight’ improvement in the market, reveals a real estate surve
Real estate project launches continued to plummet and sales volumes dropped in the first half of 2015, the rate of fall in launches exceeding that of absorption. This indicated that the residential market was striving for equilibrium. For the first time in three years, the demand for homes exceeded supply, theoretically signalling a price rise in the coming quarters. However, this seems to be more of a corrective phase, heading towards a stable market, reveals an India Real Estate Outlook report for the first half of 2015 by Knight Frank.
While sales volumes dropped by 19% during the first half of 2015 as against the first half of 2014, new launches fell by a whopping 45% during the same period. The positive news was that with the economic scenario improving and capital investments showing signs of picking up, some improvement was expected in the new launches and sales volumes across all markets in the second half of this year.
New residential launches have fallen in the top eight cities of India during the first half of 2015. The National Capital Region (NCR) witnessed the sharpest decline at 68% during the first half of 2015 with a mere 11,360 residential units launched.
Bengaluru surpassed Mumbai and
NCR during the first half of 2015 in launches. Based on interactions with developers in the top eight markets, and on analysing the pipeline, the report had positive projections for the second half of 2015 for Mumbai, NCR, Bengaluru and Pune. Despite this, the yearly number of new launches during 2015 will fall short by 36%, 59%, 25% and 5%, respectively, compared to 2014.
Apart from Pune, home sales have fallen across the top eight cities of India during the first half of 2015. NCR witnessed the sharpest decrease in sales volume, at 50%. Only 14,250 residential units were
sold, a number that’s much lower than that of Mumbai, Bengaluru and Pune.
Mumbai continues to retain the top slot among the top six cities for achieving the highest sales volume in the first half of 2015. This was followed by Bengaluru and Pune. Although the volume of home sales has been shrinking in both the top residential markets — Mumbai and NCR — Mumbai has managed sales at a decent pace, which is required to reduce the unsold inventory levels.
The NCR market, on the other hand, did not do better as short-term investors, who had earlier been boosting sales