Real estate inventory in the residential segment on a pan-India basis declined 9.5% year-on-year to 1.3 billion sq ft in November 2018 as developers cut down on new launches and sales improved.
According to Kotak Institutional Equities estimates, launches fell by 18% y-o-y to 16.2 million sq ft in November 2018, against 19.8 million sq ft during the same month last year and were significantly lower than 21.2 million sq ft in October 2018. Launches in tier-II cities dropped to 1.4 million sq ft against average monthly launches of 2.4 million sq ft in the first half of the financial year 2019.
Sales across major cities clocked 34.6 million sq ft in November 2018, an increase of 14% from 30.2 million sq ft in November last year.
The all-India prices were up by 7% y-o-y to `5,350 per sq ft during the month but had been sequentially flat in recent months, the report stated.
Sales activity in the National Capital Region (NCR) remained upbeat at 4.3 million sq ft (+31% y-o-y) in November 2018. Launches in NCR also saw a sharp uptick of 111% y-o-y with 4.5 million sq ft launches in November 2018 compared to an average of 2.3 million sq ft in the financial year 2019 till now. This spike in launches was mainly contributed by new projects in Gurugram and Greater Noida with launches of 2 million sq ft each.
Accordingly, net unsold residential inventory in NCR stood at 232 million sq ft as of November 2018 and had been equivalent to 56 months of sales (based on average of trailing 12 months). On a monthly basis, prices in NCR declined marginally in November 2018 to `4,600 per sq ft (down 9.8% y-o-y), possibly on account of a higher proportion of affordable housing projects.
On the other hand, launches in Mumbai Metropolitan Region (MMR) remained weak at 1.9 million sq ft (down by 59% y-o-y) in November 2018 and it could not keep up with the sharp increase of 7.3 million sq ft launches in October 2018.
However, sales in MMR were good with 30% y-o-y increase to 7.1 million sq ft in November 2018 and showed strong numbers in October 2018 as well at 7.8 million sq ft.
The average price realisation in the region inched downwards to `9,630 per sq ft in November 2018 (`9,700 per sq ft in October 2018), led by more low-realisation sales in the Thane region.
The outstanding inventory was highest in MMR among all metros at 280 million sq ft during November 2018 and had been equivalent to 44 months of the sales period.
Sales for Bengaluru market stood at 4.8 million sq ft, up by 24% y-o-y, against launches of 2.8 million sq ft in November 2018. The launches were low when compared with an average of 4.1 million sq ft per month in H1 FY19.
The unsold inventory continues to be the lowest in Bengaluru across regions in India at 155 million sq ft and realisation in November 2018 declined by 2% y-o-y to `4,600 per sq ft.