26% drop in new home launches in Pune in first half of 2017 : Gera report

Gera Developments today presented the Gera Pune Residential Realty Report for the period January – June 2017 which highlighted that Pune saw a sharp decline of 26% YoY in new home launches in the first half of 2017. The report indicated that, the headwinds of a slower market, combined with demonetization and RERA has had an impact on the number of homes launched in Pune. On a year on year comparison 81,922 new homes were launched in the last 12 months (July 16 to June 17) down from 1,02,036 homes launched in the previous 12 month period (July 15 to June 16) thereby a reduction of 19.7% in the total number of flats launched. The last 6 months alone has seen a drop of over 26% in the new homes launched for sale down from 47,119 flats launched in the July to December 2016 to 34,803 flats launched in January to June 2017.The premium plus segment witnessed 40%decrease in the new flats launched in the last 6 months as compared to the previous period. This is followed by a near 37% drop in new units launched in the premium segment. Mr. Rohit Gera, Managing Director, Gera Developments while sharing his perspective on the report said, “Never before in the history of India’s real estate industry have so many industry changing events taken place in such a short period of time. Demonetization, RERA & GST has all been introduced in a short period between November 2016 to July 2017. While RERA is a result of the collective misbehavior of a large section of developers, the outcome of a highly regulated, transparent, delivery oriented law will be the increase in prices customers need to pay for this low risk environment.  The question however is when will the demand supply equation allow the prices to increase. The changes in measurement (carpet area and proportionate changes for common areas) combined with the new methods for charging for car parking will render comparison of the pre RERA pre GST with the post RERA post GST as impossible and eventually, a new metric may emerge.” The report also highlighted that the sales momentum has moved into budget and value segments. The average residential property prices continued to decrease at an overall level bringing the total drop in property prices since June 2016 to 4.01% in June 2017. The PMC area saw a contraction in the market share from 29.58% down to 22.09% over the past 30 months. The cost of a home of average size at the average price was Rs. 58.14 lakhs in June 2014. This cost has come down to Rs.48.83 lakhs in June 2017, a drop of 16% in 3 years. Factoring in annual increments over the past 3 years, affordability of homes is very attractive today.