New launches in residential real estate has witnessed 16 per cent decline with the total number of units standing at about 25,800 units for the first quarter of 2017.

In its latest report, real estate service company Cushman & Wakefield said a closer look at the trend indicates that launches have seen a steady quarter–on–quarter decline for the last four quarters, corresponding with the announcement of Real Estate Regulatory Act (RERA) 2016 in March last year and the demonetisation exercise in November 2016.

Launches in the residential sector declined by about 8 per cent during the period April 2016 to March 2017 compared to the same period in 2015-16.

Interestingly, during the period (April 2016 to March 2017), the share of affordable segment in total launches improved to 30 per cent, compared to 25 per cent in the same period in 2015-16.

Dip in luxury segment

The share of high-end and luxury segments reduced to 11 per cent from 13 per cent. While sales have been weak across segments, they have been prominent in the high-end and luxury segments over the last quarters owing to demand-supply mismatches.

Anshul Jain, Managing Director, India, Cushman & Wakefield, “Launches in the residential sector are expected to remain restricted over the next 2-3 quarters as developers will be making intrinsic changes to their business structure, operations and marketing strategies to comply with RERA norms. Consumers would continue to remain restrained in the first half of the year”.

Jain said further, with mild change in end user sentiments due to news of downsizing in IT / ITeS segment, sales velocity is expected to reduce. A gradual improvement in buyer sentiment is expected towards the second half of 2017 as the impact of real estate reforms will begin to play out in the market. Capital values, which are already reduced in select locations within markets such as Delhi NCR, Bengaluru and Mumbai, will continue to remain under pressure in the coming quarter as the markets readjust in the post-RERA and GST regime.

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