Housing sales fall 30% during festive season: PropTiger report

All hopes of an improvement in numbers during the festive season were dashed, with housing sales and project launches falling during the third quarter of the financial year 2019-2020, says a report by PropTiger.com

All hopes of an improvement in numbers during the festive season were dashed, with housing sales falling by 30% during the third quarter of the financial year 2019-2020 (Q3 FY20), a report by PropTiger.com shows. As against 91,464 units in the same quarter last year, only 64,034 homes were sold across India’s nine major residential markets, during the quarter ended December 2019, the report titled ‘Real Insight – Q3 FY20’ shows. Project launches also declined by 44% during the quarter year-on-year, amid a deepening crisis in the non-banking finance sector. Only 41,133 new units were launched during the quarter, says the report. Sales and launches fell across cities during the quarter.

“Several measures launched by the government in the past, to revive growth in the real estate market, seem to have made little impact. Considering that real estate is a major contributor to overall growth, which hit 4.5% in the July-September 2019 period, we expect further assistance from the government, to nudge buyers to invest in real estate. In the Union Budget scheduled on February 1, 2020, we expect finance minister Nirmala Sitharaman to announce measures that would result in higher savings for individual tax payers, thus, prompting them to invest in properties,” says Dhruv Agarwala, group CEO, Elara Technologies.

 

  Q3 FY19 (number of units) Q3 FY20 (number of units) Change (in percentage)
Sales 91,464 64,034 -30
Launches 73,226 41,133 -44
Inventory 8,83,483 7,74,860 -12

Source: Real Insight – Q3 FY20

 

The unsold stock in the nine markets, however, reduced by 12% when compared to the level seen in the same quarter last year. Builders are now sitting on unsold stock consisting of nearly 7.75 lakh units and would take nearly 2.5 years to sell it, at the current sales velocity.

However, there was no correction in property prices, with rates increasing the most in Hyderabad in a year. With a 13% annual increase, average property values in the city hit Rs 5,318 per sq ft during the October-December 2019 quarter. The consistent growth in prices has now made Hyderabad as expensive a real estate market, as Bengaluru or Chennai.

 

Average property prices in the top 9 cities

City Average value per sq ft (in Rs)
Ahmedabad 2,974
Bengaluru 5,195
Chennai 5,221
Gurugram 5,236
Hyderabad 5,318
Kolkata 4,035
Mumbai 9,446
Noida 3,923
Pune 4,874

Source: Real Insight – Q3 FY20

 


Home sales decline by 25% in September quarter, launches fall by 45%: PropTiger report

Sales of residential real estate units in India’s top nine markets declined by 25% year-on-year, in the quarter-ended September 2019, while launches also fell by 45%, says a report by PropTiger.com

October 18, 2019: India’s real estate sector has struggled to shrug off a slowdown in the July-September 2019 quarter, with housing sales declining by 25% during the period. According to Real Insights, a quarterly analysis of India’s nine residential markets by PropTiger.com, new launches also fell by 45% during the second quarter of the current financial year (Q2 FY20), when compared to the corresponding period last year. While the report expects sales to improve in the upcoming quarter, because of the festive season, it indicates that project launches may continue to fall, as developers in India continue to be under tremendous stress on account of liquidity challenges.

“With the festive spirit kicking in, we expect home sales to improve in the October-December quarter, whereas, new launch numbers may continue to decline, amid stressed liquidity conditions,” says the report. “Record low-interest rates and intensified measures by the government to restore growth momentum, would come in handy for buyers, who are planning to materialise their property purchase plans this festive season,” says Dhruv Agarwala, group CEO, Elara Technologies.

 

Unsold inventory declines in Q2 FY20

In what seems like a relief of sorts for developers, inventory levels during the quarter declined by 13% year-on-year. As of September 2019, builders in India’s nine markets have an unsold stock of 7,78,627 units, shows the report. Inventory overhang, shows the report has also declined during the quarter to 28 months. Inventory overhang is the estimated time that is likely to be spent, in selling the existing unsold stock at the current sales velocity. So, a 28-month overhang means that developers with inventory stock in the country’s nine residential markets would take two years and four months, to sell their existing stock.

 

Property prices increase marginally

An ongoing demand slowdown notwithstanding, property values have witnessed a marginal appreciation in the past one year, shows the report. Except for Gurugram and Chennai, where prices corrected by 4% and 1% annually, respectively, values appreciated in all other cities. The upwards movement in Hyderabad real estate has continued, with prices increasing by 15% in the past one year, shows the report.

The report also indicates that over two lakh housing units were delivered in the first two quarters of this financial year, while more than four lakh new units will also be delivered in the remaining half of this financial year. Another, 4.52 lakh ready-to-move-in homes are expected to join the market by FY21.

Note:

The cities covered in the analysis are Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.

 


Affordable housing accounts for half of the unsold stock in key cities: PropTiger.com report

Units priced below Rs 45 lakhs, account for nearly half the unsold housing stock in India’s top nine cities, says a report by PropTiger.com

August 20, 2019: At a time when the government is busy launching measures to boost affordable housing in the country, homes sales and new launches in this category have declined. Units priced below Rs 45 lakhs account for nearly half the unsold stock in India’s nine key property markets, data available with PropTiger.com shows. Of the eight lakh units that have failed to find takers till June-end 2019, half were priced below Rs 45 lakhs.

Nevertheless, unsold inventory during the April-June 2019 quarter (Q1 FY20) declined by 12% year-on-year amidst a decline in new launches and comparatively better sales. While home sales in the affordable category fell 7% during the quarter ending June, new launches declined by 56%, when compared to the same quarter of 2018.

 

City Sales in the affordable housing segment
Q1 FY19 Q1 FY20 YoY change
Ahmedabad 3,666 3,577 -2%
Bengaluru 3,426 2,854 -17%
Chennai 2,078 2,301 11%
Gurugram 2,087 3,319 59%
Hyderabad 1,187 686 -42%
Kolkata 1,929 2,210 15%
Mumbai 14,512 12,459 -14%
Noida 4,192 1,867 -55%
Pune 9,751 10,551 8%
Grand total 42,828 39,824 -7%

 

City Launches in the affordable housing segment
Q1 FY19 Q1 FY20 YoY Change
Ahmedabad 5,403 259 -95%
Bengaluru 3,339 2,891 -13%
Chennai 2,340 1,723 -26%
Gurugram 1,202 3,626 202%
Hyderabad 1,330 417 -69%
Kolkata 1,414 524 -63%
Mumbai 13,795 3,633 -74%
Noida 2,688 900 -67%
Pune 9,843 4,069 -59%
Grand total 41,354 18,042 -56%

 

Future trends: Sales may improve, while new launches will remain subdued

Some improvement in sales can be expected in the upcoming quarters, after the government increased the deduction limit on home loans meant for the affordable housing category. Buyers, who take a loan to buy a unit below Rs 45 lakhs, can now avail of deductions of up to Rs 3.5 lakhs in a year, on the interest component.

“A low interest rate regime, along with the measures announced in Budget 2019, to push affordable housing, would encourage home buyers to invest actively in this category now,” says Dhruv Agarwala, Group CEO, Elara Technologies. “New launch numbers, however, may not see much improvement, as developers are entirely focused on delivering their ongoing projects. With these two factors at work, housing inventory in India’s key property markets, will decline significantly in the following quarters,” he adds.

 

Cities with the largest stock of unsold affordable housing

According to data, Mumbai has the highest unsold inventory in the affordable housing category, with over 1.39 lakh units up for grabs. Following India’s financial capital is Pune, with over 98,000 unsold affordable units. Ahmedabad, Noida and Kolkata also have substantial inventory. Buyers looking for fresh and ready-to-move-in units, can explore these markets to find a budget property and also save on taxes.

 

City Unsold inventory of affordable housing
Q1 FY19 Q1 FY20 YoY change
Ahmedabad 45,751 41,791 -9%
Bengaluru 23,950 20,146 -16%
Chennai 15,570 18,709 20%
Gurugram 22,203 22,307 0%
Hyderabad 7,965 4,881 -39%
Kolkata 33,554 30,923 -8%
Mumbai 1,65,404 1,39,984 -15%
Noida 43,204 35,811 -17%
Pune 113,771 98,378 -14%
Grand total 471,372 412,930 -12%

 


New housing launches fall by 47%, while sales decline by 11% in Q1 FY20: PropTiger.com report

Home sales in India’s nine major property markets declined by 11% in Q1 of FY20, while new launches fell by 47%, as cash-starved developers waited for the outcome of the Lok Sabha elections before making any new plans, says a report by PropTiger.com

July 23, 2019: Home sales in India’s nine major property markets declined by 11% year-on-year in the first quarter (April-June) of the current financial year (FY20), according to a report by PropTiger.com. During the same period, new launches also fell by 47%, primarily because cash-starved developers waited for the outcome of the Lok Sabha elections, before making any new plans, the report titled ‘Real Insight‘ indicates. The only relief during the quarter, came in the form of a reduced housing stock, with unsold inventory declining 12% YoY.

The cities included in the analysis were Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.

 

Launches: Gurugram defies the trend

As against 71,970 units in Q1 of FY19, only 37,852 housing units were launched in Q1 FY20, resulting in a fall of 47%. Barring Gurugram, where new launches more than doubled, from 2,588 units to 5,945 units, new launches fell across cities during this period. “The severe liquidity crunch and harsh market conditions continue to drive realtors to keep their guard on and exercise extreme caution, with respect to new launches, in order to survive in a difficult environment,” said the report.

 

City Launches
Q1 FY19 Q1 FY20 YoY change
Ahmedabad 7,499 824 -89%
Bengaluru 8,750 5,169 -41%
Chennai 3,502 2,374 -32%
Gurugram 2,588 5,945 130%
Hyderabad 5,499 2,416 -56%
Kolkata 2,846 2,004 -30%
Mumbai 22,761 8,757 -62%
Noida 3,820 1,835 -52%
Pune 14,705 8,528 -42%
Grand total 71,970 37,852 -47%

 

Sales: Some cities show pick-up

When compared to 80,628 units in Q1 FY19, only 71,957 units were sold in Q1 FY20, a fall of nearly 11%. Home sales, however, increased in some cities, including Gurugram, Hyderabad, Kolkata and Pune. The sharpest increase in sales was seen in the millennium city Gurugram, where 4,951 units were sold in Q1 FY20 as against 3,737 units in Q1 FY19 – an increase of 32%.

 

City Sales
Q1 FY19 Q1 FY20 YoY change
Ahmedabad 5,268 3,362 -36%
Bengaluru 10,219 8,431 -17%
Chennai 4,683 4,574 -2%
Gurugram 3,737 4,951 32%
Hyderabad 5,665 6,204 10%
Kolkata 3,156 3,481 10%
Mumbai 26,222 22,652 -14%
Noida 7,425 3,304 -56%
Pune 14,253 14,998 5%
Grand total 80,628 71,957 -11%

 

Sales may, however, see some improvement in the future.

“A stable government has taken charge at the centre, after the Lok Sabha elections. The new government has announced several measures in the Union Budget 2019-20 that would definitely trigger fresh activity in India’s real estate sector,” said Dhruv Agarwala, group CEO, Housing.com, PropTiger.com, Makaan.com and Fastfox.com. “The Budget has, for instance, offered relief to home buyers, by increasing the tax deduction limit on the home loan interest component to up to Rs 3.50 lakhs on affordable homes. Several banks have also lowered their interest rates, after the RBI reduced its repo rate. As a result of this, sales activity might see a pick-up in the upcoming quarters,” Agarwala added.

 

Inventory: Falling for the better

On account of an arrest in new launches, housing inventory declined by over 12% in the past one year. Real estate developers had an inventory stock of 7,97,623 units in Q1 FY20 as against 9,09,324 units in Q1 FY19. Inventory stock declined across cities during the quarter, data showed. The inventory overhang also reduced slightly to 30 months – at the current sales velocity, it would take developers less than three years to sell the existing housing stock. The report added that another 5,00,000 fresh units would join the market by March 2020.

 

City Unsold inventory
Q1 FY19 Q1 FY20 YoY change
Ahmedabad 64,563 60,521 -6%
Bengaluru 87,602 77,295 -12%
Chennai 37,878 37,109 -2%
Gurugram 47,449 46,426 -2%
Hyderabad 43,322 32,874 -24%
Kolkata 50,146 44,970 -10%
Mumbai 3,43,111 2,92,225 -15%
Noida 76,378 63,637 -17%
Pune 1,58,875 1,42,566 -10%
Grand total 9,09,324 7,97,623 -12%

 

Prices: Hyderabad shows significant positive growth

Rates of property in Hyderabad increased by 17% in the past one year, the report shows. In other cities, however, the growth was muted with rates moving upwards between two and three percentage points. Gurugram was the only city that saw some price correction in the past one year, with prices falling by 3%.

 

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