Home Sales Decline 5% In March Quarter: PropTiger
Homes sales in India’s nine major property markets declined five per cent annually in the March quarter of the financial year 2019 (FY19) amid new launches declining 34 per cent during the same period, a newly released report with PropTiger.com shows.
The inventory burden on India’s real estate, however, is seen decreasing with unsold housing stock touching its lowest level in the past three years. While the inventory declined 10 per cent when compared to the corresponding quarter in the previous financial year, the inventory overhang also reduced substantially to 30 months from 39 months a year ago.
According to Realty Decoded, a quarterly analysis of Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune property markets, prices remained largely unchanged across cities, except in Hyderabad.
Sales: The marginal fall
As against 79,601 units in the March quarter of the previous fiscal, developers in the nine property markets together sold 75,706 units in the same quarter in FY19.
The marginal decline in sales numbers could largely be attributed to the change in GST (Goods and Services Tax) rules. In order to boost sales, the GST Council in February reduced rates to pay one per cent on affordable houses and five per cent on other categories. These reduced rates, however, come without input tax credit (ITC) for developers. Builders have been given a choice to sell properties on old rates of eight per cent (affordable housing) and 12 per cent (other housing projects) with ITC.
Expecting further reduction in prices and better clarity after the Lok Sabha polls, homebuyers showed a more cautious approach in Q4.
Despite an overall decline in numbers, home sales in some cities increased in Q4, including Hyderabad, Gurugram, Pune and Mumbai.
At 26 per cent, homes sales increased the highest in Hyderabad in the quarter ending March. Noida, on the other hand, saw sales declining 50 per cent during the same period over the previous year.
Launches: Caution continues
Based on various concerns, including the existing inventory burden and financial and regulatory strain, India’s developers have shown consistent resilience when it comes to launches. The same is reflected in numbers with launches falling 32 per cent in the March quarter.
As against 66,019 units in the corresponding quarter the previous year, only 44,834 units were launched in the March quarter.
Chennai entirely defied the trend, however, as it launched more than doubled in the Tamil Nadu capital in Q4. Pune and Gurugram also saw new launches increasing.
Inventory: Easing burden
Things have begun to look up with a lessening inventory burden. With the exception of Ahmedabad and Chennai, unsold inventory declined in all the other cities.
City-wise, Hyderabad has the lowest inventory overhang at 17 months while Ahmedabad has the highest inventory overhang at 40 months. The national capital region, on the other hand, has the largest share of the inventory stock aged over three years.
Over 75 per cent of the unsold housing stock in Ahmedabad, Pune and Kolkata in the affordable segments (units priced below Rs 50 lakh).
The report indicates that over six lakh new units will be delivered in the next one year.
Unsold Inventory as on quarter end
Prices: Same-old-same old
Except for Hyderabad, where prices increased 14 per cent y-o-y, rates of property across cities have remained almost unchanged – either increasing or decreasing only marginally – in the past one year. The report, however, indicates that prices may see an upwards movement in the future as developers start adjusting rates to include the impact they would suffer due to loss of input tax credit on GST payment.