Home sales down 44% in Oct-Dec 2016, Delhi and NCR hit most

Housing market came to a “complete standstill” during October-December 2016 on adverse impact of demonetisation as sales fell by 44 per cent in the eight top cities, lowest since 2010.

This resulted in a Rs 22,600 crore revenue loss to the builders, according to Knight Frank. The property consultant has pegged the state government’s notional loss on stamp duty at Rs 1,200 crore.

Home sales in residential segment fell to 40,936 units in eight major cities during October-December 2016 from 72,933 units in the year-ago period and 68,734 units in the previous quarter, according to a report released by Knight Frank India. New home launches fell by 61 per cent to 24,316 units in the fourth quarter of 2016 compared with the year-ago period. The Delhi-NCR market was hit hardest with sales volume dropping by 53 per cent to 6,765 units in the fourth quarter of 2016 while new launches falling by a massive 73 per cent.

Knight Frank tracks the primary housing markets of eight cities — Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Home sales went up in the first nine months of 2016, but the government’s decision to scrap the Rs 500 and Rs 1,000 notes in early November pulled down the home sales in the fourth quarter as well as for the entire last year, it added.

“...the Indian government’s demonetisation move on November 8 brought the market to a complete standstill. Against this backdrop, developers refrained from announcing any new launches and buyers turned extremely cautious before committing on purchases,” the report said.

All eight cities witnessed a crash, including the usually resilient Bengaluru, during Q4 of 2016 and as a result home sales fell by nine per cent at 2,44,686 units in 2016 from 2,67,957 units during 2015.

“The residential market of the top eight cities in India started off on a positive note in 2016 with H1 witnessing a seven per cent jump in sales volume compared to H1 2015. H2 2016 also began at the same pace with Q3 2016 sales volume showing a positive growth on the back of the start of the festive season,” Knight Frank India CMD Shishir Baijal said.

However, he said the demonetisation move pulled down the last quarter sales across all cities.

“The fall in Q4 was intense, H2 2016 ended below H2 2015. And 2016 ends at launches and sales being lowest since the global financial crisis,” Baijal said.