By: Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
An integral parts of Indian residential real estate’s coming-of-age process is the rise of *branded developers, who are outpacing their non-branded competition in overall housing launches. Reformatory changes led by demonetization and RERA have spearheaded this movement.
ANAROCK research indicates that out of the total new supply in H1 2019 – approx. 1,39,480 units in the top 7 cities – over 53% (73,930 units) were launched by branded developers, and 47% by non-branded entities. In H1 2018, branded developers’ share was 52% and during H1 2016 – before DeMo and RERA – non-branded developers had a 60% share (approx. 95,600 units) of the total of 1,59,090 newly-launched units in the top 7 cities. Branded developers accounted for 63,490 units (40%) of the total supply in the period.
*Branded developers include listed developers, players actively operating for 10 years or more, newly-formed entities of large conglomerates, and players with sizeable areas under development either locally or pan-India.
The Shifting Post-Reforms Power Balance: The aftermath of DeMo was first felt in H2 2016 itself. In H1 2016, the ratio between the supply of branded vs non-branded changed from 40:60 to 46:54 in the H2 2016 – the DeMO period. Thereafter, the change has been significant with supply from branded players overtaking that of non-branded ones.
For instance, in H1 2018, as many as 87,580 units were launched across the top 7 cities. Out of this total, nearly 52% (comprising approx. 45,540 units) were launched by branded developers while the remaining 48% (42,040 units) were by the non-branded players. With the share of branded players increasing to 53% in H1 2019, the writing is clearly on the wall.
Branded vs Non-Branded Supply: Y-o-Y Change
Source: ANAROCK Research
The Change Catalysts: This tectonic shift in the Indian residential real estate sector is the natural outcome of two major and very perceptible change catalysts, and one subtle but profound realignment in the overall demand profile:
All Buyers Benefit: Not for the first time, the millennial generation has kick-started a progressive trend which benefits the who consumer value chain. Leading developer brands which earlier restricted their efforts to niche luxury offerings are now venturing into the high-demand affordable and mid-segment categories. Their increased supply gives buyers at large the option of investing in homes by the top names in the real estate industry, and thereby availing of all the associated benefits.
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