Residential sales continued to gain momentum in the country with an increase of 3% over the previous quarter. Total units sold in Q1 FY’18 were 53,352 across 9 cities.
Residential sales continued to gain momentum in the country with an increase of 3% over the previous quarter. Total units sold in Q1 FY’18 were 53,352 across 9 cities. Despite the multiple policy changes such as demonetisation, RERA and GST, the sales in Q1’FY 18 were only lower by 4% compared to the Q1’FY 17 sales of 55,500 units. A 38% growth in sales velocity was seen compared to last quarter in projects which were launched 7 to 12 months ago, said a report by PropTiger.com, part of Elara Technologies Pte Ltd, for the Q1’FY 18 (April- June).
The report further highlights that Mumbai and Pune maintained lion’s share with 23% and 18% of total absorption, respectively, as RERA allowed sales even without registration for 3 months. The policy in fact contributed in strengthening customer confidence in the sector, thus ensuring strong share for Mumbai and Pune. However, property prices remained stable with a marginal increase of 1%, as developers were awaiting clarity on the impact of GST on the sector and hesitated to increase the property price. Except Hyderabad and Bengaluru, all other cities had witnessed price stagnation for the last 3 years.
The study covered nine key Indian cities of Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
|Source: PropTiger DataLabs Jun’17 (Data for apartments and villas)|
According to the study, the new launches in the sector reduced by 43% in Q1’FY 18 with 29,606 units against 51,521 units in Q4 FY’17 (Jan-Mar). However, compared to the same quarter last year, the drop is only 28%. This could be attributed to the stricter norms under RERA. The reduction in new launches further pushed developers to offer aggressive deals for existing projects which brought down inventory overhang by 5%.
Commenting on the report, Ankur Dhawan, Chief Investment Officer, PropTiger.com, said, “Policy changes in any sector lead to initial slowdown, but long-term growth. With RERA implementation in more cities, we might see a further dip in the launches in Q2 FY’18. Sales also will slow down as developers will rush for registering their projects and arriving at new cost sheets and brochures. However, this dip could be the beginning of road to recovery for the real estate sector. With the realignment of demand and supply in a few months, we can expect the sector to see signs of revival in the last quarter on the back of more regulated space and festive offers by developers.”