‘Cannot yet say there is a clear recovery but there is an upswing’
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.
Launches can go up to 2015 levels with a revival in demand, which is happening in the affordable segment