Chairman, ANAROCK Property Consultants
The year 2017 has been an action-packed year, not just for the real estate sector but for the entire nation. While the structural changes and policy reforms (demonetisation, RERA and GST) shook up the economy, it imbibed financial discipline, accountability and transparency across various sectors. As per the statistics released by Economic Survey, the economy is expected to grow at 7-7.5 per cent in 2018-19, eclipsing China to become the fastest growing economy.
In 2017, the performance of residential real estate was lackluster due to the sector’s transition from an unorganised to an organized one, amid changing regulatory environment. The big-picture reforms are making the market buyer-friendly and further attracting global investors to consider India as one of the preferred destinations for real estate investments.
With two months into 2018, ANAROCK Property Consultant’s research report presents some of the trends reflecting the state of residential real estate market across the country’s top seven major metropolitan cities.
New launch supply declines
The last month of 2017 added around 6,600 new units across the top seven cities of India while in January 2018, only 5,500 units were launched – amounting to a 17 per cent decline in launches. New launches in many cities, including the National Capital Region (NCR) and Hyderabad, were more sluggish in January 2018 than in December 2017. Only Bengaluru and Mumbai Metropolitan Region (MMR) witnessed a marginal rise in new launch supply. The restricted new supply addition was primarily due to developers’ focus on project execution and clearing existing unsold inventory.
Also, under the stringent RERA norms, new projects can be launched only after securing necessary approvals. As a result, the previous craze for pre-launches and soft launches finally faded into history.
- The big-picture reforms are making the market buyer-friendly and further attracting global investors to consider India as one of the preferred destinations for real estate investments.
- New launches in many cities, including the National Capital Region (NCR) and Hyderabad, were more sluggish in January 2018 than in December 2017.
- In January 2018, the NCR recorded a whopping 28 per cent increase in the sale of units launched in the same month. Similarly, MMR and Hyderabad also showed positive signs with a hike of 11 per cent and 10 per cent respectively.
- All in all, 2018 is a good year for end-users to make their move. Investors will have to wait a while longer before they have reason to become bullish on the Indian residential sector again.
Rise in absorption levels
Although new launches declined in the first month of 2018 when compared to the previous month, absorption was on the rise. The absorption of homes across the top seven Indian cities doubled from 250 units in December 2017 to 500 units in January 2018.
In January 2018, the NCR recorded a whopping 28 per cent increase in the sale of units launched in the same month. Similarly, MMR and Hyderabad also showed positive signs with a hike of 11 per cent and 10 per cent respectively. Pune and Chennai saw a marginal rise of 4 per cent and 3 per cent respectively in the sale of units launched in the same month.
India’s economic fundamentals are gaining strength as the momentum of the incumbent Government’s statutory reforms continues. The nation’s residential real estate industry is also aligning itself with prospects of strong long-term growth. The sector is expected to stabilise with lower interest rates, rising absorption levels and decreasing unsold stock. To achieve this, developers across the metropolises are restricting the new launches and trying to offer the most competitive rates to offload their existing inventory.
All in all, 2018 is a good year for end-users to make their move. Investors will have to wait a while longer before they have reason to become bullish on the Indian residential sector again. The ratio of end-users vs. investors in the Indian residential sector is currently an interesting and telling 70:30.
With 50 bps hike, repo rate at pre-Covid level, home loan set to move northwards
August 5, 2022: The Reserve Bank of India on Friday raised the key lending rate, the repo rate, by 50...
Jaypee Greens Kalypso Court gets OC, becomes first ‘rehabilitated project’ to be completed under the aegis of U.P. RERA
Gautam Budh Nagar/Lucknow: Jaypee Greens Kalypso Court Phase -2 (UPRERAPRJ4695) located in JP Wish Town, Sector 128, Gautam Buddh Nagar...
Yubi launches Real Estate and Infra Financing platform, Yubi Build
Yubi (formerly CredAvenue), has announced the launch of its real estate and infrastructure financing platform, Yubi Build. Yubi Build aims...
After two years, 35% of companies see offices back in almost full swing: Survey
August 4, 2022: According to a C-Suite Survey conducted by Colliers and Awfis, about 35% of the occupiers have seen...
H1 2022 I&L leasing in India touched 12.8 mn sq. ft., supply addition crossed 10 mn sq. ft.
August 04, 2022 – CBRE South Asia Pvt. Ltd, today on Thursday announced the findings of its latest Industrial &...
IBO forays into Tamil Nadu
Chennai, August 3, 2022: Omni-channel destination for home building and renovation, IBO, on Wednesday announced their foray into Tamil Nadu,...
Interviews4 weeks ago
Building an ecosystem where people could work, play and entertain, says BHIVE CEO
New Launches4 weeks ago
Aludecor aims Rs 1100 cr turnover by 2025 from new products and exports business
News4 weeks ago
Office leasing in India records highest-ever quarterly growth of 18.2 mn sq ft in Q2’22
Tech Take3 weeks ago
IoT and M2M: How the two techs differ
News3 weeks ago
Happiest Minds purchases 2.4 lakh sq ft office space in Bengaluru
Tech Take4 weeks ago
Functioning of IoT sensors explained
Interiors4 weeks ago
Bonito Designs join hands with Gauri Khan, Manish Malhotra to offer bespoke home interiors to the first few customers
News3 weeks ago
125 new project registration applications in UP RERA during the period of Jan-June’22