According to a study by property consultants Knight Frank, homes launches in 2017 plummeted by a staggering 78 per cent to 1,03,570 units. The peak of the realty boom in 2010, saw as many as 4,80,424 units being launched. “By the end of 2017, the residential sector had shrunk to a fraction of its size in less than a decade. Nevertheless the near-standstill triggered by the note-ban, seems to have tapered with time,” Knight Frank India chairman, Shishir Baijal said in the report.
New launches across the eight key metros of Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad, declined 41 per cent in the second half of 2017 to 40,832 units, from 68,702 units in the same period in 2016. During the second half of 2017, Hyderabad recorded the steepest fall, at 84 per cent. The other IT/ITeS-dominated markets like Pune, Bengaluru and Chennai fell by 58 per cent, 37 per cent and 33 per cent, respectively, compared to the same period in 2016. Sales declined marginally to 1,07,316 units in the second half of 2017, from 1,09,159 in the comparable period in 2016. However, from the sales peak of 2011 when 3,68,568 units were sold, this is a step decline of 62 per cent in 2017 at 2,28,072 units.
“Select markets, wherein RERA has matured, have seen developers re-launch projects at attractive prices, which led to an uptick in sales in 2017. This strategic switch by developers, led to a price reduction in most markets. It is a buyers’ market today and we hope the momentum holds steady in the near future,” Baijal added. The report notes that for the first time, the sector witnessed price correction in 2017. “Delhi-NCR, Mumbai, Kolkata, Bengaluru, Chennai and Pune, saw prices falling by 2-7 per cent, while in Ahmedabad and Hyderabad this was two per cent and three per cent, respectively,” it said.
In case of office space, new completions increased seven per cent in 2017 to 32.7 million sq ft, compared to 30.7 million sq ft in 2016, but not at par with demand. Supply grew 13 per cent to 12.5 million sq ft, compared to 11.1 million sq ft in 2016 and the report blamed the headwinds in the technology sector and supply crunch, for this subdued growth.