H2 Limits 2019 Housing Growth, 15% Lower Sales in Q4 2019 Over 2018 – ANAROCK

• Top 7 cities see housing sales of over 2.61 lakh units in 2019 against 2.48 lakh units in 2018, rising by 5%; but out of total sales in 2019, H1 comprised 56% share
• Approx. 2.37 lakh units launched in 2019 compared to 1.95 lakh units in 2018 (up by 21%); but new supply in H2 slips 30% against H1 2019
• Affordable supply increases 22% on y-o-y basis (to be 94,530 units), comprising 40% overall share
• MMR & Pune steal the residential show in 2019; outperform previous year’s ‘showstopper’ – Bangalore; but the western cities’ growth fell sharply in H2 2019
• Housing sales exceed total number of units launched in 2019 – third year in a row
• Unsold inventory declines by 4% in a year – from 6.73 lakh units in 2018-end to over 6.48 lakh units as on 2019-end
• Property prices maintain status quo in most top cities
• DHFL crisis, lower-than expected consumer sentiments & faltering economic growth put brakes on residential growth in H2 2019 compared to first half that did fairly well
• Growth in 2020 is riding high on positive impacts of the govt-announced measures, implying that sops such as stressed funds (of INR 25,000 cr) need to be swiftly implemented else it could derail Indian residential growth

Mumbai, 26^th December 2019: Of the total 2.61 lakh housing sales seen in 2019 across the top 7 cities, over 56% (or approx. 1.47 lakh units) were sold in the first half itself, finds the latest study by ANAROCK Property Consultants. On half-yearly comparison, residential sales in H2 2019 plummeted 22% against H1 2019 while on yearly basis there was a marginal rise of 5% in entire 2019 compared to 2018.

On the supply front, of the total 2.37 lakh units launched in 2019, H2 saw new addition of over 97,000 units as against 1.4 lakh units in the first half, thus seeing a half-yearly decline of 30%. However, on yearly basis, there was a 21% rise in new supply in 2019 over 2018.

Anuj Puri, Chairman – ANAROCK Property Consultants says, “The unrelenting liquidity crisis, lower-than-expected buyer sentiments and faltering GDP growth eventually put brakes on the overall housing growth in the second half of 2019. However, among the top cities, MMR and Pune were clearly the showstoppers of residential real estate in 2019 as they recorded housing sales rise of 22% and 18% respectively, leaving Bangalore (which saw sales fall 12% yearly) far behind. Both top cities collectively saw residential sales of nearly 1.22 lakh units as against 78,860 units in all south cities (Bangalore, Chennai and Hyderabad) and 46,920 units in NCR in the north. In terms of new launch supply too, MMR and Pune came out on top in 2019 with annual increases of 30% and 89% respectively. Among the top 7 cities, MMR saw maximum new launches during the year at 78,000 units while Pune was second best at over 46,100 units.

Segment-wise analyses reveals that affordable housing continued its growth momentum yet again in 2019 with overall new supply rising by 22% – from 77,590 units in 2018 to nearly 94,530 units in 2019. Of this, 54,660 units were launched in the first half alone.

The economic challenges of 2019 widely eclipsed overall residential growth during the second half of the year. However, both housing sales and new launches increased in 2019 as compared to the preceding year. Stronger branded players were the clear winners and took charge amidst the changing preferences of new-age homebuyers towards branded realty.

“Residential growth in 2020 will mainly depend on the swift on-ground implementation of some of the previously-announced sops including stressed funds (of INR 25,000 Crore). If not, it may negatively impact the sector with buyer sentiments derailing even further. And if done timely, these measures will yield positive impact on the Indian real estate in 2020. A major part of the residential growth will most likely unfold in the second half of 2020. And, the financially stronger players will stay ahead in the game.”

Residential performance in H1 2019 – far better than H2 2019

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Source: ANAROCK Research

2019 vs 2018: New Launch Overview

The top 7 cities recorded new unit launches of approx. 2,36,560 units in 2019 as against 1,95,300 units back in 2018. The key cities contributing to 2019 new unit launches included MMR (Mumbai Metropolitan Region), Pune, NCR, and Bengaluru, altogether accounting for 84% of addition.

• Approx. 77,990 units were launched in MMR – a significant rise of over 30% from 2018. Approx. 66% new supply were added in sub INR 80 lakhs budget segment.
• Bengaluru added approx. 39,930 units in 2019, a yearly increase of 14% over 2018. Approx. 30% new supply was added in the affordable segment.
• NCR added new supply of 35,280 units in 2019 compared to 26,010 units in 2018 – a significant rise of 36%. Approx. 47% new supply was added in affordable segment.
• Pune added 46,100 units in 2019, a massive jump of 89% over 2018. Approx. 89% new supply was added in sub INR 80 lakhs budget segment, out of which 44% comprised of affordable units.
• Hyderabad added approx. 14,840 units in 2019, a decrease of 14% over 2018. Approx. 47% new supply was added in sub INR 80 lakhs budget segment.
• Chennai added approx. 13,000 units in 2019, a yearly decrease of 17% over 2018. Approx. 39% new supply was added in affordable segment
• Kolkata added approx. 9,420 units in 2019, a significant decrease of 45% over 2018. Approx. 50% new supply was added in the affordable segment.

Source: ANAROCK Research

2019 vs 2018: Residential Sales Overview

Around 2,61,370 units were sold in 2019 – yearly increase of 5% over 2018. NCR, MMR, Bengaluru and Pune together accounted for 84% of the sales.

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• MMR recorded the highest jump in sales in 2019 as compared to other top cities. City sales increased by 22% – from 66,440 units in 2018 to 80,870 units in 2019 due to significant increase in new launch supply.
• NCR’s sales increased by 6% – from 44,300 units in 2018 to 46,920 units in 2019.
• Pune sales significantly rose by 18% – from 34,460 units in 2018 to 40,790 units in 2019 due to significant increase in new launch supply.
• Bengaluru sales decreased by 12% – from 57,540 units in 2018 to 50,450 units in 2019.
• Sales in Kolkata & Hyderabad decreased by 11% each over the 2018 and were recorded at 13,930 units and 16,590 units respectively in 2019.
• Approx. 11,820 units were sold in Chennai, a mere increase of 4% over 2018.

Source: ANAROCK Research

Unsold Inventory – 2019 vs 2018

 Increase in new launches and overall absorption in the top 7 cities during 2019 when compared to 2018 resulted in overall unsold inventory decreasing by a meagre 4% – from 6.73 lakh units in 2018 to 6.48 lakh units by 2019.

Source: ANAROCK Research

Price Movements

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Average residential property prices across the top cities increased by mere 1% in 2019 when compared to 2018 except Kolkata & NCR where prices remained stagnant.