Sales of new homes in the country’s key cities plunged 32% year-on-year in the three months to September with transactions down to a trickle.
Sales of new homes in the country’s key cities plunged 32% year-on-year in the three months to September with transactions down to a trickle. Ghulam Zia, ED, Knight Frank India, said buyers were probably staying away in anticipation of new properties where they could get better prices and discounts. Anuj Puri, chairman, Anarock Property Consultants, believes prices are unlikely to trend up and should remain stable. “The festive season was not as good as one would have hoped and prices should be stable,” Puri said. Indeed, between the new real estate law and GST, the property market appears to have been robbed of activity, with experts saying the effects of demonetisation are on the wane. “With RERA coming in buyers preferred to wait,” explained Puri. Not surprisingly, developers are busy complying with the new rules and have shied away from new launches—these plummeted a sharp 81% y-o-y in the July-September period. “Prices have been stable and in some markets they have even come down but the new launches are few,” Zia said.
Sales in the July-September period stood at 22,669 units, across top eight cities of India, data from PropEquity showed, with new units launched at 4,313 units. The fall in new launches has seen the unsold inventory stay at 4,46,730 units in September quarter, similar to levels seen a year back. The newly enacted Real Estate (Regulation and Development) Act, 2016 requires builders to register all properties. “ The lack of new launches is due to developers focussing on compliances with RERA and GST,” Samir Jasuja, founder and CEO of PropEquity, said. The Noida market was among the worst hit with new unit launches crashing 87%. In Gurugram, no new launches were witnessed in July-September.
The Mumbai region too was impacted with new unit launches lower by 84% at 562 units. No new launches took place in Chennai during the July-September period. “Developers were cautious about launching new projects as all the approvals have to be received and the project has to be registered on the RERA website before launch,” an industry expert said. Absorption witnessed a sizeable dip of 57% year-on-year while unsold stock in the period under review decreased by 4% on year.