The national capital region (NCR) is dragging the annual overall residential sector recovery, reports Priyanka Ghosh in Mumbai. A latest report by consulting firm Knight Frank India reveals new launches between January and June declined to a three-year low, led by the NCR micro-market. Launches fell by 41% in the NCR, 36% in Chennai and by 32% in Pune. This was offset by launches in Mumbai, which grew by 29%. So total residential launches were lower by 9% compared annually across the eight cities of Mumbai, Pune, Chennai, Hyderabad, Bengaluru, NCR, Kolkata and Ahmedabad. That said, if launches of seven cities are considered, ex-NCR, new launches grew by 2% overall.
In terms of sales, the sector witnessed a positive growth of 7%, the report observed. Number of units sold jumped from 126,615 to 135,015. Mumbai and Bengaluru led the sales volume during the period, growing by 23% and by 18% respectively. However, cities such as NCR, Chennai and Kolkata are still reeling under pressure in terms of sales volume and have reported a negative growth, the report stated. Excluding NCR, sales grew by 10%. According to Samantak Das, chief economist and national director at Knight Frank India, home buyers are not confident in the NCR segment as some developers in the region have incessantly delayed delivery of projects. Additionally, a number of projects in the area are mired in litigation issues, relating to either approvals or land title, which makes consumers doubly cautious, Das added.
The drop in new launches and pick-up in the sales volume have naturally eased some of the inventory pressure in the last six-month period. The unsold units available in the market have reduced from 710,340 units in H1 2015 to less than 660,240 units in H1 2016 — a 7% y-o-y fall.
The report noted that Bengaluru and Pune continue to remain the best performing residential markets in India, with minimal quarter to sell (QTS) unsold inventory whereas the worst performing market is NCR once again, as it has the highest unsold inventory.
Going forward, new launches are expected to drop by 9% y-o-y in H2 2016, with NCR leading this drop. Launches in NCR are expected to fall by 42% in H2 2016 compared to H2 2015.