Mumbai: Residential sales across eight major cities in India improved 15% in the second quarter of 2016-17, especially throughout the festive season. Further improvement is predicted when more affordable apartments are available in these markets.Interestingly, this trend of improved sentiments was evident even throughout the duration of pitra paksha, a time considered inauspicious for big purchases by many Indians,
On an annual basis, residential sales across eight major cities in India improved 15% within the second quarter of 2016-17. Sales were dominated by the Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) that have shown 39% and 11% growth, respectively, on a year-on-year basis. Ahmedabad and Kolkata also saw an improvement in sales, says the residential market report for the second quarter of the financial year 2016-2017 (quarter ending September 2016) by Liases Foras released today.
New launches in Bengaluru have dipped by 1 / 3 compared with the last quarter. This shows developers are concentrating more about offloading existing inventory. Unsold stock across tier-I cities climbed 12% and was related to new launches with the maximum increase observed in Kolkata, followed by Ahmedabad and MMR. Due to the steady pace of sales, the month’s inventory dropped across most locations with the exception of Chennai and Kolkata.
Not only the affordable segment with units priced up to `50 lakhs showed a higher demand during the quarter but also the luxury segment with apartments priced over `2 crores witnessed a 38% annual growth in demand. Mumbai Metropolitan NCR, Region, and Bengaluru were the biggest contributors to sales.
The current quarter is expected to remain good as sales throughout the Diwali season have improved. Going forward, it is only going to improve if prices do not go up and interest rate come down further. Both realty brokers and developers expect the seventh pay commission recommendations which are being implemented by the central government to provide a positive and stable effect on the economy by means of increased spending for creating long-term assets.
“We expect a significant demand revival with improved sentiments in sight along with increased affordability for users. With positive factors such as falling interest rates and the ongoing festival season, we are confident of meeting our guidance of brand new product sales of 3.50 million sq ft this financial year,“ said JC Sharma, vice chairman of Bengaluru-based Sobha Developers that registered sales of 855,662 sq ft priced at `518 crore across its projects in nine cities throughout the second quarter.
The residential sales growth momentum has spilled over to the ongoing festive quarter too and developers have already started reporting relatively better numbers. Godrej Properties recently announced that it has sold over 6 lakh sq.ft. of villas having a booking value in excess of `. 300 crore in a single day at the launch of their first project and Crest, at its 100-acre township Godrej Golf Links in Noida.Pirojsha Godrej, MD & CEO of Godrej Properties, reckons that the market might be weak but good projects from strong developers continue to accomplish well.
Pankaj Kapoor, MD, Liases Foras Property Rating & Research who released this reported is quoted to have said that, this is the best quarterly sales performance we have seen over the past 5 years. Price correction has certainly helped buyers enhance their affordability .The ongoing Diwali quarter is slated to become even larger given the improvement in sentiment and economic growth. Housing loan rates of interest have eased to just about 6-year low and that is certainly helping drive the demand from the end user.
State Bank of India, the country’s largest commercial bank, has reduced its home loan rates to 9.1%, the lowest in six years as an element of its festive scheme. The move is coming bang in the center of an active real estate season and will probably be followed by several other lenders leading to lowering borrowers’ mortgage loan installment burden.
Since the gap between affordability and prices has reduced and home loan rates came down, prices have more or less remained unchanged. Also, buyers are preferring ready-to-move-in properties .It has also been observed that about 30% to 40% of the sales in Delhi NCR is recorded from the ‘ready to move in’ housing projects of Greater Noida west. Most of these residential projects are either offering possession or are nearing completion. The mixture of a top quality project with a large number of lifestyle amenities, a good location, and a strong brand has helped the project receive a robust response.
The residential sales growth momentum has spilled over to the ongoing festive quarter too and developers have already started reporting relatively better numbers. Godrej Properties recently announced that it has sold over 6 lakh sq.ft. of villas having a booking value in excess of `. 300 crore in a single day at the launch of their first project and Crest, at its 100-acre township Godrej Golf Links in Noida.Pirojsha Godrej, MD & CEO of Godrej Properties, reckons that the market might be weak but good projects from strong developers continue to accomplish well.