From a plunge in launches to falling sales of housing units, the data indicates that real estate developers are in dire straits despite a slew of measures announced by the government to revive the sector.
According to the latest data from realty consultancy firm PropTiger, launches shrank by 45 per cent in top nine metros during the July-September quarter (Q2) over the same period last year. The number has come down to 33,883 units in Q2 this financial year from 61,679 units launched during the same quarter last year. In fact, the number is lower by a third from the previous quarter (April-June), when some 49,800 units were launched.
While launches were the least in Kolkata (536 units), Noida followed with 736 units. Overall, all top metros, except for Gurugram, witnessed a fall in number of unit launches.
Sales, however, dropped in all nine top markets. While sales plunged a whopping 57 per cent year on year (YoY) in Noida, developers in Gurugram saw a dip of 31 per cent, followed by Bengaluru (-29 per cent). A quarter-on-quarter (QoQ) fall of 23 per cent in sales of housing units in top nine markets during Q2 indicates towards worsening sentiment among homebuyers.
“The realty stakeholders’ sentiment has gone in the ‘pessimistic’ zone for the current quarter, owing to poor demand, despite a plethora of measures by the government. However, it is more significant to note that for the first time, the stakeholders are wary of the next six months for the real estate sector and the overall economy, thus pushing the sentiment score in the red,” said Shishir Baijal, chairman and managing director, Knight Frank India.
According to him, the measures by the government are mostly focused on affordable housing segment, leaving out the vast majority of real estate market. These measures have not helped infuse confidence in the stakeholders, as the real challenge lies in demand side, where end users are unwilling to make home purchases owing to lack of financial confidence.
“The supply side sops will not be enough till the time demand is revived by putting money in the hands of the consumer and the confidence is restored,” he said.
The data from Knight Frank shows that for the first time in several years, market sentiment about the future (next six months) is in negative. This is worse than the demonetisation quarter and the quarters preceding the 2014 general elections, when the prevailing market sentiments were worse but stakeholders were more hopeful about a revival.