A PropTiger.com study on India’s nine key property markets in the January to March quarter (Q4) has reported a 5% year-on-year decline in home sales and a 32% fall in new project launches. However, as per the report, unsold housing stock declined by about 10% in the same period, providing a breather to developers.
“While there might not be any significant improvement in new launches and home sales in the first quarter of FY20, things may start to change after the results of the Lok Sabha elections are announced,” said Mani Rangarajan, group chief operating officer, Elara Technologies, which owns PropTiger.com. “In fact, as more clarity emerges on issues pertaining to GST, these numbers might see improvement in the quarters that follow. Property rates would also see an upward movement in time to come,” he said. As per the report, developers sold 75,706 units in Q4 as against 79,601 units in the Q4 FY18. The decline was on account of changes in the Goods and Services Tax (GST) transition rules, the report said.
Despite an overall decline in numbers, home sales in some cities including Hyderabad, Gurugram, Pune and Mumbai increased in Q4.
At 26%, homes sales increased the highest in Hyderabad, while Noida saw a 50% decline. Home sales dropped 23% in Bengaluru. Except Chennai, Pune and Gurugram, new launches fell across cities, resulting in an overall decline of 32% in Q4 year-on-year. Ahmedabad, Kolkata, Bengaluru and Mumbai saw the sharpest fall in launches in the quarter.
Chennai — reverse trend
Chennai witnessed an opposite trend with launches more than doubling year-on-year. A cautious approach among developers to improve sales and restrict launches resulted in a fall of 10% in the unsold housing stock in Q4 FY19 as compared to the same quarter the previous year.
Commenting on this said Rahul Grover, president of Sales and Operations, Sai Estate Consultants Chembur Pvt. Ltd., said: “In terms of inventories, there has been a bit of decline than the previous year. However, we see buyer interest picking up ahead of the festive season. Also, the revised GST rates effective April 1 will give a much-needed boost to the unsold inventories.”
As against 8,90,719 units in Q4 FY18, unsold housing stock in the nine markets stood at 8,00,438 units in Q4 FY19. Apart from Ahmedabad and Chennai, unsold inventory declined in all the other cities.
Overall inventory overhang, too, reduced significantly to 30 months in Q4 FY19 from 39 months in Q4 FY18, the report said. While Hyderabad has the lowest inventory overhang at 17 months, it is 40 months in Ahmedabad, it added.
Real estate prices also remained unchanged in all markets except for Hyderabad, where prices increased 14% y-o-y.
