Residential Sales Modest, Office Segment Shows Strong Absorption
After witnessing a revival of sorts in 2018 housing sales have witnessed a growth of 14% in the first nine months (January-September) of 2019 as compared to the corresponding period in 2018, according to India Real Estate Market Update Q3 2019, released by JLL. The office segment witnessed strong leasing, registering a jump of 40% during the same period as compared to the corresponding period in the previous year, the report added. However, housing sales during the period couldn’t touch the levels seen in the pre-demonetisation era, when nearly ~120,000 units were sold across the top seven markets, the report added. Compared to this, the top seven markets during the January-September period of this year witnessed a sale of ~115,000 units, it said. Mumbai, Bengaluru and Delhi NCR continued to account for 60% of the total sales during the period. During the July-September quarter of 2019 (Q3), sales momentum remained the same as compared to the corresponding period of 2018. Existing unsold inventory has come down as a result of a steady momentum in sales and drop in launches across the top seven markets. The third quarter of 2019 saw a moderate decline in new launches of 4% on a Y-o-Y basis. Except for Mumbai and Delhi NCR, all the other cities witnessed a dip in new launches in Q3 2019. Mumbai and Bengaluru continued to dominate new launches and formed more than 60% the overall launches during the quarter. “The revival seen in housing sales in 2018 has been maintained during 2019 as well. Developers have been focusing on the timely delivery of already launched projects and have been trying to clear their unsold inventory. Since the beginning of the year, several measures including a cumulative 110 bps rate cut have been announced to help the sector revive and grow. While banks are yet to fully transmit the rate cuts by a corresponding reduction in lending rates, this has strengthened consumer sentiment. We hope that developers will be able to register good sales during the festive season,” said Ramesh Nair, CEO & Country Head, JLL India. The report added developers have continued to concentrate on the mid and affordable segments. However, new launches in these segments came down in most of the cities, mainly attributable to the already existing substantial number of under construction units in these segments. “Going forward, a surge in sales will primarily hinge on improved consumer confidence and rising affordability, which in turn depends upon the effective and uniform implementation of progressive government policies and regulations such as RERA across all the states. It is expected that residential sales will improve going forward with lowering of bank lending rates. For now, buyers will continue to be inclined towards ‘nearing completion’ and ‘ready to move in’ properties in the backdrop of challenges on timely deliveries of projects,” said Siva Krishnan, MD - Residential Services, Developer Solutions and Strategic Consulting.
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