‘Can­not yet say there is a clear re­cov­ery but there is an up­swing’

The Hindu Business Line - - NEWS - AB­HISHEK LAW

Al­though res­i­den­tial sales across the coun­try have re­ported a pos­i­tive year-on-year growth, it is still early to say the sec­tor has wit­nessed a turn­around, says Arvind Nan­dan, Ex­ec­u­tive Di­rec­tor – Re­search, Knight Frank (In­dia). In an in­ter­view to Busi­nessLine, Nan­dan talks about the ex­pected re­cov­ery in home sales in 2019, the rise of al­ter­nate as­set classes, among oth­ers. Ex­cerpts:

What is the out­look on the home sales front?

Res­i­den­tial sales and sup­ply have picked up in 2018, on a year-on-year ba­sis after seven years. Home sales rose 6 per cent. This could have been much bet­ter, had the NBFC trou­ble not come in. Be­cause of that, sales in Q4 of 2018 (Oc­tDec) took a hit.

So the turn­around has hap­pened?

It is too early to say that the sec­tor has reached an in­flex­ion point. I wouldn’t say it is a clear re­cov­ery, but def­i­nitely an up­swing. The year 2019 is an elec­tion year. It is dif­fi­cult for the mar­ket to pick-up at least till elec­tions are over. Then, the after-ef­fect of the NBFC cri­sis — liq­uid­ity crunch is there for both builders and buy­ers. How­ever, the good growth in of­fice seg­ment, pickup in af­ford­able hous­ing, and hope­fully with no more trou­ble be­ing added, sales growth should per­sist.

Do we see an in­crease in new project launches now?

Pre­vi­ously, sup­ply got throt­tled be­cause of de­mon­eti­sa­tion, im­ple­men­ta­tion of the GST and RERA and other reg­u­la­tory fac­tors. But, in H2 2018 (July to Dec), and also for the full year, there was a sub­stan­tial pick up in launches over the same pe­riod last year.

But, if we com­pare launches in 2018 to say that of 2015, can we say num­bers have im­proved?

New project launches are (still) not that high as in 2015. You can­not ex­pect new launches to reach that level after go­ing through shocks. How­ever, launches can go up to that level with re­vival in de­mand. This is be­ing wit­nessed with af­ford­able hous­ing with 60 per cent of the sup­ply com­ing in ₹50 lakh and below seg­ment.

How has al­ter­nate as­set classes emerged?

In all like­li­hood, al­ter­nate as­set classes like co-work­ing spa­ces will con­tinue with their steep climb in 2019. There has been a 52 per cent growth in co-work­ing seg­ment in H2 of 2018 (July to Dec) over H2 of 2017.

ARVIND NAN­DAN Ex­ec­u­tive Di­rec­tor, Re­search, Knight Frank (In­dia) ZY

Launches can go up to 2015 lev­els with a re­vival in de­mand, which is hap­pen­ing in the af­ford­able seg­ment

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