Affordable Housing Keeps the Momentum Going
Anuj Puri, Chairman – ANAROCK Property Consultants
There has been a whopping 50% jump in overall new housing launches in Q2 2018 over the preceding quarter, with the maximum supply in the affordable segment (< ₹ 40 lakh). Interestingly, the affordable housing supply increased by 100% in Q2 2018 over Q1 2018, and this supply has led the overall growth.
On the sales front too, housing sales across the top 7 cities of India also rose by 24% compared to Q1 2018, indicating that hitherto abstaining home buyers are back on the market. Developers are working hard on clearing unsold inventory with attractive schemes, freebies and discounts. Moreover, the positive impact of the policy reforms including RERA and GST have begun to bear fruit.
Affordable Housing – 100% jump and key growth contributor Q2 supply
Q2 2018 New Launch Tracker
The top 7 cities (NCR, MMR, Chennai, Bengaluru, Pune, Kolkata and Hyderabad) witnessed new unit launches of around 50,100 units in Q2 2018 as opposed to 33,400 units in Q1 2018. The major cities contributing to Q2 2018 new unit additions include Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, altogether accounting for 75% of the new supply.
Improving Sales Figures
In terms of housing sales during Q2 2018, top 7 cities together witnessed an increase of 24% over the previous quarter. Around 60,800 units were sold in Q2 2018 with NCR, MMR, Bengaluru and Pune together accounting for 81% of the overall sales. End-user driven Bengaluru led the pack on the back of re-ignited interest from IT/ITeS professionals reacting to the mitigated job risks and overall favourable economic environment.
Unsold Inventory – The overall unsold inventory declined by 2% – from 7.11 lakh units in Q1 2018 to 7.0 lakh units in Q2 2018 (by 10% from 7.7 lakh units in Q4 2017).
Marginal Price Increase – Residential property prices across the top cities increased by 1% in Q2 2018 compared to the previous quarter, barring Chennai and Kolkata (where prices remained stagnant). The ample unsold stock is keeping price growth in check.
Dominant Segments – The market continued to be dominated by the affordable and mid-range segments. 77% (38,600 units) of unit launches were in the price category of less than INR 80 lakh. The affordable segment accounted for a whopping 46% share of the total new launches.
Considering the growth in supply and sales in H1 2018, the upcoming festive season may finally be a vibrant one again, more so as more new launches across the major cities will offer buyers a wider spread of options and help control prices.
However, will infrastructure status to affordable housing and sops for MIG-I and MIG-II homebuyers under PMAY help fulfil the Government’s vision of Housing for All by 2022? It’s still hard to say, but what is certain is that affordable housing has kept the market’s momentum going for some time now. If developers remain laser-focused, add only relevant supply and ensure 100% RERA compliance, we may yet see this ‘dream project’ become a reality.
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