New Launches Dip 47 per cent in Q1 FY20: PropTiger.com Report
As the liquidity crunch in the real estate sector is seen deepening amid a crisis in the banking sector, new project launches in India’s nine major cities fell by 47 per cent during Q1 (April-June) FY20. According to Real Insight, a quarterly report by PropTiger.com that analyses data for nine key property markets across the country, home sales during the quarter declined by 11 per cent as compared to the same period last year, even as housing inventory declined 12 per cent. Property prices, however, remained largely flat, with only Hyderabad seeing an impressive annual appreciation of 17 per cent.
Since developers have shifted their focus towards completing their pending projects, a total of 1,20,500 units were delivered during Q1 FY20, says the report, adding that another 5,00,000 new units will be delivered by March 2020.
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GAINERS AND LOSERS
Gurugram has emerged as the top performer during the quarter after registering positive growth in home sales, as well as new launches. While new launches more than doubled in the city, home sales increased by 32 per cent. The millennium city was in fact the only market where new launches increased in the quarter ending June.
Another positive news for homebuyers came in the form of a price correction in this otherwise expensive market. Rates of properties in Gurugram, declined by three percentage points in the past one year, shows the report.
Meanwhile, Hyderabad stood on a solid footing during the quarter when compared to its other southern peers. While launches declined by more than half, home sales numbers improved by 10 per cent as compared to the corresponding quarter last year. India’s pharmaceutical capital also has the best inventory profile in the country - the inventory is comparatively new (ages less than three years) and the overhang the lowest - at the current sales velocity, it would take a little over a year to sell the existing stock.
Hyderabad also topped the charts when it came to price appreciation with 17 per cent increase in property rates in the last one year.
Sales and Launches
Kolkata and Pune also showed an increase in home sales in the June quarter year-on-year, by 10 and five per cent, respectively.
With a drop of 56 per cent, Noida registered the biggest fall in sales during the quarter, followed by Ahmedabad where sales fell 36 per cent.
The biggest decline in new launches was seen in Ahmedabad with a drop of 89 per cent and the Mumbai Metropolitan Region with a fall of 62 per cent.
Noida has the worst inventory stock in the country. Not only did the housing stock increase 2 per cent in the affordable segment in the past one year, something that no other city witnessed, the overhang here is 41 months as opposed to the national average of 30 months. At the current sales velocity, it would take nearly 3.5 years more to sell off the existing housing stock in Noida.
Ahmedabad, Pune and Kolkata are the ideal places for affordable property investments since over 70 per cent of the unsold inventory is within the Rs 50 lakhs budget. The largest options for ready-to-move-in units lie in Ahmedabad and Chennai.
Note: The cities included in the analysis are 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.