Housing Sales to Remain Strong Despite Modest Launches in First Half

Ambar Bhattacharya, abptakmaa, Kolkata, 3rd July 2019:Sales are expected to remain strong despite modest new launches in the countrywitnessed during the first half of the year (H1 2019), according to the latest JLL report, Residential Market Update – H1 2019, released today. With Hyderabad being on topamong the seven cities, residential real estate market witnessed an increase of 22% in sales at a pan-India level during the period, it said. Y-o-y sales in Kolkata stood at 33%.

Interestingly, the share of affordable and mid-income housing (ticket size of up to INR 10 million in Mumbai and INR 7.5 million across other cities), has seen an increase up to 58% at the country level, the report added. Pune tops the list, with 91% units falling in the affordable and mid-income category. These segments comprise a decent 40% in Kolkata.

The report added, with gradual revival in homebuyers’ confidence and improved affordability, markets witnessed a resurgence in sales in 2018. The resurgence continued in H1 2019.

Sales

	H1 2016	H2 2016	H1 2017	H2 2017	H1 2018	H2 2018	H1 2019
Kolkata	4442	5655	778	1524	2955	3721	3923

Source: JLL REIS

The declining trend in sales of residential units observed during the past years was arrested in 2018.

Sales across the top seven cities are likely to receive a further fillip with progressive policies of the government. “Series of reforms and rising buyers’ interest in the segment have propelled the sector to align itself to the market demand. Interestingly, in most cities, homebuyers continue to focus on ready to move in projects and projects nearing completion. As a result of this shift in buying preference, developers too are focused on completing their ongoing projects,” said Ramesh Nair, CEO & Country Head, JLL India.

With developers focusing on delivery of already launched projects, new launches of residential units decreased by 11% on a y-o-y basis across the top seven cities, the report added. With the exception of Mumbai and Bengaluru, where launches grew y-o-y, all other cities saw a dip during H1 2019. Mumbai, Delhi NCR and Bengaluru continued to dominate launches and formed three-fourth of the overall launches during this period.

“Limited number of launches by developers, in a way, is helping the sector to balance the demand supply scenario in the country. This will act as a cushion and help the sector revive. As a result of the reform measures more specifically RERA and GST, we expect more transparency in the sector which in turn will bring back buyers’ confidence. ” said Siva Krishnan, Head – Residential Services, Developer Solutions and Strategic Consulting.

Launches

	H1 2016	H2 2016	H1 2017	H2 2017	H1 2018	H2 2018	H1 2019
Kolkata	4442	5655	778	1524	2955	3721	3923

Source: JLL REIS

Uncertainty regarding the elections in H1 2019 and constitutional validity of West Bengal – Housing Industry Regulatory Authority (HIRA) have led to the developers adopting a restrained approach.

The report added that an assessment of year-to-sell (YTS) and average construction period across cities reflects a parity, indicating optimal signs of inventory management. “With Delhi NCR and Kolkata being the exception, the average YTS at 3.4 years across the seven cities compares favourably with the average construction period for a typical residential project across these cities at 3-4 years,” said Samantak Das, Chief Economist and Head of Research & REIS, JLL India. Publicity : Blue Lotus.