Branded developers share in total housing supply rise to 56 pc in 2018: Anarock

Housing demand appears to be shifting from fly-by-night developers to those having better execution track record, as launch of new homes by real estate players with high-recall brands accounted for more than half of the total housing supply in 2018, a report says.

According to property consultant Anarock, with hundreds of housing projects stuck across major cities of the country, the potential homebuyers have become risk-averse and are investing money in projects developed by branded players.

Anarock has defined branded developers as those who have been operating for a decade and more or those with sizeable areas under development either locally or pan-India. Newly-formed entities of large conglomerates also have been included.

"In metros as well as tier II and tier III cities, a real estate developer's brand name wields considerable clout," said Prashant Thakur, Director & Head Research, Anarock.

Real estate players with high-recall brands account for a whopping 56 per cent share of the total housing supply in 2018.

In 2015, out of the total housing supply across the top seven cities, branded players had a 41 per cent share while the remaining 59 per cent homes were by unbranded developers.

By the end of 2018, the overall share of large branded players rose to 56 per cent of the total supply of about 1,95,300 units.

India is among the top three most brand-conscious nations globally, Thakur said.

"The Indian consumer's quest for branded products spans almost all products from fashion, gadgets, cosmetics and toiletries - and now even homes," he added.

As with clothing and gadgets, well-known developer brands are known to deliver much more in terms of design, specifications, overall quality and after-sales service than their generic counterparts, the consultant said.

The new supply by branded real estate firms is no longer limited to the premium and luxury segments and they have spread themselves across the high-demand affordable and mid-segments.

"Highly-established developers are known to conduct careful research on their locations and are therefore able to pinpoint the most happening growth corridors," Anarock said.

The branded players also have better financial capabilities to execute projects, it added.

"Demonetisation, Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST) put a hard leash on unregulated practices and their practitioners - in the Indian real estate. Small developers were particularly impacted," the report said.

The report further noted that "Low sales, lack of capital in hand and zero weightage with private equity funds caused several smaller developers to either exit or court consolidation via mergers, acquisitions, and joint developments with larger organised players.