Realty Rebounds In Q1; Home Sales Soar 8%
The real estate sector in India finally seems to be coming out of the shadow of a downturn with home sales registering an eight per cent growth in the first quarter (Q1) of the financial year 2016-17 (FY17) over the last quarter of the previous financial year. According to a PropTiger DataLabs report, 55,550 housing units were sold across cities in Q1 as compared to 51,550 units in the fourth quarter of the financial year 2015-16.
The report analyses property markets in Ahmedabad, Bengaluru, Chennai, Gurgaon (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.
A look at the key finding of the report:
The sales volume, says the report, was largely driven by property markets of Bengaluru, Pune and Mumbai. These markets contributed 61 per cent to the total sales in Q1. At 23 per cent, India’s financial capital Mumbai was the largest contributor to home sales, while Bengaluru stood second with 19 per cent share. Property markets of Ahmedabad and Hyderabad, on the other hand, recorded the highest quarterly sales in the past eight quarters. Noida, a property market which was the biggest casualty of the recent slowdown, made a strong comeback in the April-June quarter and reported its highest sales in four quarters. Gurgaon, on the other hand, saw the highest home sales in seven quarters.
The launching mode
Data show the launch pattern witnessed a reversal in Q1. New launches across cities saw a 14 per cent increase quarter-on-quarter (Q-o-Q)—from 36,000 units in FY16 Q4 to 41,000 units in the April-June quarter. More than 50 per cent of these launches were in the affordable segment. The government’s Housing For All Mission, among many other initiatives, seemed to have given fresh zeal to developers. Ahmedabad, Mumbai and Pune saw the highest new launches in this period.
Not acting pricey
On average, property prices remained range-bound in the period with some cities making an exception. While Hyderabad property prices saw an annual rise of eight per cent in Q1, Ahmedabad witnessed a price appreciation of seven per cent. While Gurgaon and Noida saw a yearly price decline of three per cent, property markets of Bengaluru and Chennai saw prices going up by a similar percentage. But, Kolkata and Pune markets saw an annual decline of one per cent.
The inventory burden that was a major cause of concern for developers seems to be slowly easing, too. From 38 months in the previous quarter to 35 months in Q1, inventory overhang across cities plummeted. It is to be noted this is the second time in the past 13 quarters that inventory overhang has fallen. Earlier, it had dipped in the third quarter of the FY16.
Sticking to the delivery date
As the Centre gears up to implement the various provisions of the Real Estate (Regulation and Development) Bill, 2016, developers are focusing more and more on timely delivery of their projects. According to the report, the average delivery of projects as a percentage of under-construction stock increased nearly four times in Q1. This increase was more pronounced in the affordable segment, adds the report.