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Residential sales are showing signs of momentum with an increase of three per cent in Q1 over the previous quarter. The total units sold in Q1 FY18 were 53,352 across nine cities, a PropTiger report ‘Realty Decoded Report’ for the Q1’FY 18 (April- June) said.
Despite the multiple policy changes such as demonetisation, RERA and GST, the sales in Q1’FY 18 was only lower by four per cent compared to Q1’FY 17 sales of 55,500 units. A 38 per cent growth in sales velocity was seen compared to last quarter in projects which were launched 7 to 12 months ago.
The report further highlights that Mumbai and Pune maintained lion’s share with 23 per cent and 18 per cent of total absorption respectively as RERA allowed sales even without registration for 3 months.
The policy in fact contributed in strengthening customer confidence in the sector, thus ensuring strong share for Mumbai and Pune. However, property prices remained stable with a marginal increase of one per cent, as developers were awaiting clarity on the impact of GST on the sector and hesitated to increase the property price.
Except Hyderabad and Bengaluru, all other cities had witnessed price stagnation for last 3 years.
The study covered nine key Indian cities of Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
According to the study, the new launches in the sector reduced by 43 per cent in Q1’FY 18 with 29,606 units against 51,521 units in Q4 FY’17 (Jan-Mar). However, if we compare against same quarter last year, the drop is only 28 per cent. This could be attributed to the stricter norms under RERA. The reduction in new launches further pushed developers to offer aggressive deals for existing projects which brought down inventory overhang by 5 per cent.
Ankur Dhawan, Chief Investment Officer, PropTiger.com, said: “Policy changes in any sector lead to initial slowdown but long-term growth. With RERA implementation in more cities, we might see further dip in launches in Q2 FY’18. Sales also will slow down as developers will rush for registering their projects and arriving at new cost sheets and brochures.
However, this dip could be the beginning of road to recovery for the real estate sector. With the realignment of demand and supply in few months, we can expect the sector to see signs of revival in the last quarter on back of more regulated space and festive offers by developers.”
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