Unsold inventory decreased by 2% from 7.27 lakh units in Q4 2017 to 7.11 lakh units by Q1 2018
Mumbai, 5 April 2018: According to ANAROCK Property Consultants’ latest research, 2018 has started on a positive note with residential unit launches making a comeback and recording a 27% increase in Q1 2018 from the previous quarter across top 7 cities of India. With policy reforms and structural changes now in place, developers are intent on making up for the lost ground.
In Q1 2018, sales across top 7 cities of India also rose by 12% compared to Q4 2017, indicating that serious homebuyers are back, attracted by the new environment of transparency, accountability and financial discipline.
“The series of policy reforms and structural changes have transformed the way Indian real estate business is conducted. This has been a definite blessing. The sector is by no means out of the woods yet, but we are now seeing some green shoots of recovery,” says Anuj Puri, Chairman – ANAROCK Property Consultants. “The market has turned end-user friendly and 2018 is bringing new launches that match demand. The days of product mismatch are on their way out.”
Q1 2018 New Launch Tracker
With more clarity on the back of faster clearances and approvals, new launches surged in Q1 2018. While there is an undeniable need to focus on executions to avoid penalization under RERA, timely new launches are also critical so that the secured approvals do not lapse. In terms of launches, 2018 has certainly commenced on a strong note. If demand picks up faster, we may witness a consummate increase in new launches as well.
“In terms of sales during Q1 2018, almost all the cities recorded a rise over the previous quarter – except Chennai, which recorded a 12% decrease,” says Anuj Puri. “The overall quarterly increase of 12% in sales is a good indicator of reviving demand.”
Improving Sales Figures
Around 49,200 units were sold in Q1 2018 with NCR, MMR, Bengaluru and Pune together accounting for 80% of the sales.
The increase in launches in the top 7 cities during Q1 2018 when compared to the previous quarter resulted in overall unsold inventory decreasing by a meagre 2% – from 7.27 lakh units in Q4 2017 to 7.11 lakh units by Q1 2018. A notable aspect of new launches in Q1 2018 was that the share of Tier I developers increased from 35% in the previous quarter to 40% in the current quarter. Evidently, the expected RERA Effect in terms of boosting organized players is making itself felt.
Residential property prices across the top 7 cities remained largely range-bound in Q1 2018 when compared to the previous quarter. The primary reason was the significant unsold stock to the backdrop of limited improvement in demand. Affordable and mid-segment housing dominated, with 74% of unit launches (24,600 units) coming in with price tags under INR 80 lakh. Supply is now being very visibly geared towards end-users, and this is a major shift from Indian real estate’s previous investor/speculator-driven orientation.
The seeds of reforms sown in 2017 showed some results in Q1 2018. Although it would be premature to announce a full-fledged recovery mode, the quarterly progress is encouraging. Only time will tell if 2018 as a whole will be a comeback year for the Indian real estate sector. However, if developers remain laser-focused, add only relevant supply and ensure 100% RERA compliance, the massive latent housing demand in the country will certainly help catalyze a formal recovery.
Your email address will not be published. Required fields are marked *
ICRA: US sanctions on RUSAL put Indian automobile industry on crossfire
Atlas Copco India Launches “Smart Connected Assembly”– supporting the vision of Industry 4.0
Hon. Union Minister Suresh Prabhu presents Chemexcil awards in Mumbai
2014 The Global Indian New Network (TGINN)