Residential launches rise 76%: KFI
Knight Frank India recently launched the 10th edition of its flagship half-yearly report - India Real Estate. It states that the residential market saw some upward movement in sales velocity, but the year stopped short significant recovery. Total sales of residential units were estimated to be 242,328 registering a 6% increase over full year 2017.
Residential market highlights for top eight cities: National Capital Region (NCR), Mumbai, Bengaluru, Hyderabad, Chennai, Ahmedabad, Pune, Kolkata
2018 marks the first time in this decade when annual launch numbers have grown Y-o-Y.
The total new units launched in full year 2018 are estimated to be 182,207, which were higher by 75% as compared to the total units launched in 2017.
H2 2018 saw a total of 89,500 (approximately) new unit launches which was 119% up compared to H2 2017.
60% of all launches were within the Rs. 50 lakh bracket that most developers are concentrating on the affordable and mid–ranged segment. Mumbai (38,390 units), Pune (18,580 units), Bengaluru (11,830 units) saw the highest new unit launches in full year 2018.
Mumbai saw the highest Y-o-Y growth of 220%, while Pune recorded a nearly 157% increase. A fullfledged RERA in both these cities in Maharashtra, coupled with the reprieve from dumping ground ban in Mumbai, facilitated the growth in new launches.
Most markets recorded moderate growth in prices. Mumbai prices fell by 7% while Hyderabad prices vaulted by 7% Y-o-Y in 2018. Pune (-3%), Kolkata (-4%) and Chennai (-3%) recorded a moderate correction in asking prices. NCR (+2%), Bengaluru (+2%) and Ahmedabad (+1%) meanwhile saw prices increase marginally. An improving regulatory environment, reducing prices, indirect discounts and an increasing infusion of residential products that are more in tune with the homebuyer’s preferences have culminated in a 6% Y-o-Y growth in sales during 2018. Sales volume in full year 2018 was estimated at 242,328 units. Bengaluru saw the highest annual increase in sales by 27% Y-o-Y in 2018, riding on the back of economic stability and job security. Even the NCR saw sales improve by 8% Y-o-Y in 2018, on the back of stronger sales traction in Noida and Greater Noida.
Kolkata (-10%) saw a decline in sales in full year 2018 over 2017.
The total unsold inventory levels have reduced at the end of 2018 and are estimated to be 468,372 units which were lower by 11% since end of 2017 and close to 30% lower than 2016.
Shishir Baijal, Chairman and Managing Director, said, “The residential market in 2018 recorded a recovery after seven years, which has been led by the affordable segment. Incentives from government such as lower GST rates and infrastructure status to affordable housing have fuelled the demand for the sector. The supply side has accordingly calibrated itself in this period. Having said that, the NBFC crisis created a liquidity crunch in the second half of 2018, which restricted sales, particularly in Mumbai and NCR in H2 2018.”
"The markets will remain in a cautious mode due to the upcoming general elections and the after-effects NBFC crisis through most of the first half of 2019. On the positive side, the anticipated downward revision of GST on under construction houses should provide a boost to the buyer sentiment. This, coupled with stable interest rates and inflation remaining largely under control, should lead to increased velocities in the second half of 2019. The focus is expected to continue in the affordable segment,” he added.