Housing sales fell 30%; new launches decline 44% in Q3FY20: PropTiger report

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New Delhi, January 14, 2020: New project launches in India’s nine key residential markets continued to show a decline, falling 44 per cent year-on-year in the period between October and December 2019, primarily on liquidity concerns, shows the report by PropTiger.com, part of Elara Technologies, that also owns Housing.com and Makaan.com.

According to “Real insight Q3FY20”, a quarterly analysis of India’s nine key property markets by PropTiger DataLabs, the ongoing industry concerns related to the NBFC sector, on which real estate developers largely depend on for their financial needs, has made borrowing difficult for builders at a time when a demand slowdown has hit housing sales. This double whammy has resulted in developers continuing to show a cautious stance towards new project launches.

“The various measures launched by the government in the recent past to revive growth in the real estate market seem to have made little impact. Considering real estate is a major contributor to overall GDP, which hit a glacial 4.5 per cent rate of growth in the July-September period, we expect further assistance from the government, which would nudge buyers to invest in real estate. In the Union Budget scheduled to be released on 1st February, we expect the Hon’ble Finance Minister to announce measures that would result in higher savings for individual taxpayers, some of which would hopefully make its way towards property purchases,” said Dhruv Agarwala, Group CEO, Elara Technologies, the country’s only full stack real estate technology platform that owns Housing.comMakaan.com and Proptiger.com

Sales fell across cities

Housing sales in India’s nine key property markets fell 30 per cent annually during the October-December quarter despite the government launching several measures in the recent past to revive buyer sentiment. As against 91,464 units sold during the quarter last year, only 64,034 homes were sold across the nine markets in Q3 this year.

Mumbai contributed nearly 40 per cent to overall sales numbers.

What points towards a nation-wide phenomenon, sales declined across all these markets, with Bengaluru, popularly known as India’s Silicon Valley, registering a 50 per cent fall in sales numbers.

When compared to the first nine months of the previous financial year, sales fell by 13 per cent during the same period in the current fiscal. As against 263,294 units last year, only 228,220 housing units were sold this year.

Units Sold Growth
City
Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 YoY (%) Q3vsQ3 QoQ (%) Q2vsQ3
Ahmedabad 5,960 6,414 6,479 5,578 5,118 -14% -8%
Bangalore 10,299 10,092 9,600 8,425 5,155 -50% -39%
Chennai 4,467 4,605 4,571 3,772 3,015 -33% -20%
Gurgaon 4,069 6,970 5,880 3,581 3,834 -6% 7%
Hyderabad 7,869 8,857 7,723 7,002 4,372 -44% -38%
Kolkata 3,810 4,341 4,333 3,052 2,566 -33% -16%
Mumbai 30,850 27,527 28,726 24,882 25,198 -18% 1%
Noida 4,556 4,148 3,627 3,038 2,830 -38% -7%
Pune 19,584 17,911 18,034 15,883 11,946 -39% -25%
Grand Total 91,464 90,865 88,973 75,213 64,034 -30% -15%

 

Sold Units
City
Apr-Dec 18 Apr-Dec 19 YoY (%)
Ahmedabad 17,436 17,175 -1%
Bangalore 31,932 23,180 -27%
Chennai 14,011 11,358 -19%
Gurgaon 11,794 13,295 13%
Hyderabad 21,505 19,097 -11%
Kolkata 10,754 9,951 -7%
Mumbai 85,811 78,806 -8%
Noida 19,141 9,495 -50%
Pune 50,910 45,863 -10%
Grand Total 263,294 228,220 -13%

 

Inventory declined 12%

As buyers showed greater faith towards ready homes, inventory levels, declined 12 per cent during the quarter. From 8.83 lakh unsold housing units at the end of the same period last year, unsold stock fell to 7.75 lakh in Q3 FY20. Mumbai and Pune together contribute 57 per cent of this unsold stock.  Also, half of the units in this stock are affordable homes (units priced below Rs 45 lakh).

At the current sales velocity, builders would take 29 months to sell off the existing stock.

Unsold Inventory YoY (%) – Q3vsQ3 QoQ (%) Q2vsQ3
City Dec/2018 Mar/2019 Jun/2019 Sep/2019 Dec/2019 Dec 19 Vs Dec 18 Dec 19 Vs Sep 19
Ahmedabad 60,015 57,220 52,294 50,690 48,367 -19% -5%
Bangalore 86,335 83,447 80,520 79,046 79,496 -8% 1%
Chennai 36,642 37,344 35,384 33,304 33,694 -8% 1%
Gurgaon 46,364 44,469 44,522 44,199 42,071 -9% -5%
Hyderabad 42,140 41,509 38,349 35,216 33,227 -21% -6%
Kolkata 46,364 44,861 42,040 40,029 37,979 -18% -5%
Mumbai 338,894 328,052 317,253 305,018 296,465 -13% -3%