Housing sales rose six per cent in 2018 in eight major cities as developers reduced prices and offered indirect discounts to lure customers, property consultant Knight Frank India said in its report released Monday.
Sale of residential units increased in six cities — Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad and Ahmedabad; but declined in two cities — Kolkata and Pune.
Higher sales volumes resulted in drop in the number of unsold units by 11 per cent to nearly 470,000 units.
JLL India said housing sales rose 47 per cent in seven cities, ANAROCK data suggested 16 per cent rise in seven cities, and PropTiger showed 25 per cent rise in sales in nine big cities.
The difference in the figures is on account of variation in locations in the respective reports.
"An improving regulatory environment, reducing prices, indirect discounts and an increasing infusion of residential products that are more in tune with the homebuyers' preferences have culminated in a six per cent year-on-year (YoY) growth in sales during 2018," Knight Frank India said.
Sales volumes in 2018 were estimated to be 242,328 units as against 228,072 units in the previous year.
Bengaluru saw the highest annual increase in sales of 27 per cent YoY in 2018, riding on the back of economic stability and job security, the report said.
The NCR market saw sales improve by 8 per cent YoY in 2018, on the back of stronger sales traction in Noida and Greater Noida.
Sales declined in Kolkata (-10 per cent) and Pune (-1 per cent) in 2018, against 2017.
"The total unsold inventory levels have improved at the end of 2018 and are estimated to be 4,68,372 units, which were lower by 11 per cent since end of 2017 and close to 30 per cent lower than 2016," the consultant said.
The launches of new homes rose sharply by 76 per cent to 1,82,207 units in the eight cities covered in the report.
Knight Frank India CMD Shishir Baijal said, "The residential market in 2018 recorded a recovery after seven years, which has been led by the affordable segment".
The incentives from the government such as lower GST rates and infrastructure status to affordable housing have fuelled the demand in the sector, he said.
The supply side has accordingly calibrated itself in this period.
"Having said that, the non-banking financial companies' (NBFC) crisis created a liquidity crunch in the second half of 2018, which restricted sales, particularly in Mumbai and NCR in H2 2018," Baijal said.
The markets would remain in cautious mode due to the upcoming general elections and the after-effects of NBFC crisis through most of the first half of 2019, he observed.
Baijal said the anticipated downward revision of GST on under-construction houses should provide a boost to buyer sentiment.
"This, coupled with stable interest rates and inflation remaining largely under control, should lead to increased velocities in the second half of 2019. The focus is expected to continue in the affordable segment, Baijal said.