The first six months of 2016 seem to have gone well for the residential real estate market in the top eight cities in India—sales have increased, prices have remained flat, and the unsold inventory is the lowest in the last two years.
The eight cities include Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
According to the latest real estate report published by Knight Frank India, between January and June 2016 over 6.6 lakh residential units remained unsold, which was a decline of 7% year-on-year.
In January-June 2015, top eight cities in India recorded 7.10 lakh unsold units. Mumbai, Pune, Hyderabad and Chennai are leading in the reduction of inventory, says the report.
NCR continues to be the worst performing market in India, as it recorded the highest unsold inventory yet again, and quarter to sell (QTS) unsold inventory.
NCR recorded over 2 lakh unsold units, which will take around 4.5 years to sell. In contrast, the unsold units in Mumbai declined to 1.70 lakh units from nearly 1.95 lakh units last year, and will take about 2.5 years to sell. Bengaluru and Pune continue to remain the best performing residential markets in India, with minimal QTS.
The new launches touched a three year low, as they dropped by 9% y-o-y to 1.07 lakh units. This downward trend was led by NCR, which saw the sharpest fall of 41% in the new launches. This was followed by Chennai and Pune at 36% and 32% respectively. Mumbai sprung a surprise as the city noted growth in new launches by more than 29% y-o-y.
Meanwhile, sales volumes across these eight cities jumped 7% y-o-y with over 1.35 lakh units getting sold in the first six months to June 2016.
Mumbai and Bengaluru led this positive growth in sales volume, at 23% y-o-y and 18% y-o-y respectively. However, NCR, Chennai and Kolkata proved a drag yet again, as they continue to reel under pressure in terms of sales volume.