Revival in realty? Home sales are up, Rs 25-50 lakh bracket most preferred

Even as developers struggle with mounting debt, key cities barring the National Capital Region have witnessed a 5 per cent annual rise in home sales in the quarter ended December 2018, according to a report by real estate consulting firm Liases Foras. 

Chennai witnessed the maximum year-on-year growth in home sales at 22%, followed by Hyderabad and Pune at 18% and 14%, respectively. Only NCR witnessed a 17% dip in sales on a yearly basis.

Chennai sees maximum growth in sales, NCR sees biggest fall

Sales trends in major cities ( Data from Liases Foras) 

Maximum sales in sub Rs 50 lakh category 

Close to 53% of the sales of this quarter were contributed by the sub Rs 50 lakh segment, in which the segment of 25-50 lakh gained momentum, with a 12 percent year-on-year growth. However, the ultra-luxury segment witnessed an 18 percent drop on year and a 6 percent drop on a quarterly basis. 

Ironically, the affordable segment has witnessed a dip. Sales in Less than Rs 25 lakh bracket decreased by 3% on a QoQ basis 10 percent on a yearly basis. 

Sales in luxury segment (Rs 1Cr – Rs. 2Cr) increased by 6% on QoQ basis and by 8% on YoY basis.

How prices have moved in the last one year 

Have prices dipped? 

On average prices are down marginally by 1 percent. NCR  and Chennai have seen the biggest dip of 3 percent while Mumbai prices have not changed at all. Bangalore and Kolkata, witnessed a 2% drop. Hyderabad (7%), Ahmedabad (1%) and Pune (1%) saw an increase in prices in the same period. 

NCR and Chennai see the biggest price drop on year. ( Data from Liases Foras) 

 

Launches are up

New launches in Tier I cities witnessed an increase of 81%. Bangalore led the pack, followed by Hyderabad and Pune. The surge is also due to base effect because 2017 was a year of major policy changes and the general market sentiment was noticeably low, the report says adding, the year 2018 was visibly a year of recovery with a revival in the market sentiment and future expectations.

"The various policy interventions at national level like Real Estate (Regulation and Development) Act, 2016 (RERA), goods and services tax (GST), among others although led to some apprehensions initially, but clubbed with other  interventions like increase in limit of size of flat for subsidy under Pradhan Mantri Awas Yojana (PMAY), extension of credit linked subsidy scheme (CLSS) for middle-income group (MIG) and others have definitely helped to bring back the confidence of both end users and developers in the industry," Liases Foras said in its report. 

New launches are on the rise ( Data from Liases Foras) 

What about inventory? 

Unsold stock has seen a 3% rise on a YoY basis while the quarterly figures have remained stagnant. Apart from Chennai, all cities recorded stagnant/slight drop in unsold stock as compared to Q2 FY 2018-19.