Home sales up 3% in H1, launches surge 46%: report

Home sales in the January-June period remained muted despite a dip in property prices and significant growth in new launches across eight major real estate markets in India, said the latest report by real estate advisory firm Knight Frank India Ltd.

After almost two years of a slump, new launches witnessed 46% growth to 91,739 units in the first half of 2018, compared to the corresponding period of the previous year. Home sales grew just 3% at 124,288 units during the period. The report compiled data across eight cities, including Mumbai, Delhi-NCR, Bengaluru and Pune.

“Sales stagnated despite increased launches, reduced prices, government reforms and incentives.” However, both sales and launches grew in the past 18 months, reaching its highest level since demonetization in November 2016, it added.

Home launches in Mumbai recorded the maximum number of launches, growing 128% from the year ago period, followed by Delhi-NCR and Pune, which grew 75%.

The report said developers have been trying to free up the “capital locked in inventory” at increasingly lower prices and holding off new launches to alleviate mounting financial stress.

According to the report, average home prices have fallen by around 3% across the eight cities, with Mumbai recording the highest fall. “Effective price drop of 10-15% continues in cities such as Mumbai, NCR, Pune and Kolkata. Hyderabad bucks the trend with an exceptional price growth at 8% on year-on-year,” the report said.

“The turbulent times starting from November 8, 2016, to the changes in 2017, have really shaped the way the residential market is moving ahead. This, coupled with cities such as Mumbai, where the ban on construction took place and Delhi, where the NGT (National Green Tribunal) ruling happened, has really stalled the entire industry,” said Shishir Baijal, chairman and managing director, Knight Frank India.

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