Calendar year 2016 ended with the lowest launches and sales witnessed in the residential real estate segment since 2010 and the demonetisation effect has been acutely felt by the sector, a Knight Frank India report released on Tuesday revealed.
The global property consultancy firm has pegged the notional revenue loss to real estate industry at Rs 22,600 crore as a result of demonetisation.
As expected, for the six months of July-December 2016, the year-on-year sales volume and new launches declined by 23% and 46% respectively across eight Indian cities of Mumbai, Pune, NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Ahmedabad. The July-December 2016 period recorded launch of 68,702 units down from 1.27 lakh units during July-December 2015. Meanwhile, the sales fell to 1.09 lakh units against 1.41 lakh units last year. The majority of the impact was felt in the three months of October-November, the report said.
The national capital region, which comprises Delhi and its suburbs remained the most affected market and in fact witnessed a decline in demand and supply by 29% and 73% respectively. Mumbai Metropolitan Region too, which was in a recovery mode in the first six months of 2016 lost its momentum and the launches and sales plummeted by 53% and 26% respectively. FE reported on January 9, that sales in Mumbai’s property market have plunged to a six-year low with the demonetisation impact.
With a decline in launches, the unsold units stock across India remained flat in the six months ended December, witnessing a decline of a mere 3% at 6.7 lakh units. The unsold units in MMR declined 14% y-o-y to 1.55 lakh units, while in NCR the unsold stock declined marginally by 3.5% to 1.93 lakh units.
Shishir Baijal, chairman and managing director, Knight Frank India said that the fall in Q4 was intense, as a result of which H22016 ended below H22015. “The year 2016 ends at launches and sales being lowest since global financial crisis. Uncertainty is likely to continue in the next quarter.”