Key residential property markets see growth in July-Septemeber

Key residential markets across India showed some signs of improvement with all indicators witnessing a growth during the July-September quarter of 2018 versus the same period last year, said the latest findings of PropEquity. Housing demand across key cities increased 6% year-on-year largely on account of increase in the number of end-users driven by more availability of ready inventory in the market, providing buyers with several risk-free options in attractive prices. With the marginal rise in absorption, the unsold stock declined by a moderate 8% y-o-y. New launches increased 12% to 32,870 units while it dropped a good 22% on a sequential basis in the nine cities combined. However, the prices of unsold units showed no signs of abatement, albeit marginally. The average prices of unsold units increased 2% at Rs 7,928 per square feet. During the quarter ended September, cities with significant inventory overhang have seen no increase in prices as developers were compelled to reduce prices to clear off high inventory, said the report. The trend was most visible in Gurgaon and Noida, which have highest unsold inventory in India. In comparison, southern cities of Bengaluru and Hyderabad had comfortable inventory levels and hence did not witness a drop in prices, in fact registered a rise of 1% and 3%, respectively, on a y-o-y basis. Meanwhile, in Mumbai, contraction in supply of housing units continued, while demand witnessed a rebound. New launches in Q3 fell by a good 9%, owing to the high inventory overhang. However, absorptions witnessed a sharp 20% increase on a y-o-y basis, while the average prices remained unchanged at Rs 22,629 per square feet. The present trend would come out as a good news after a long lull in the real estate sector. Last year, property prices in Mumbai and beyond were falling fast – almost 15-20% over the past 12 months or so – with builders looking to rid themselves of unsold inventory. Not only were discounts getting bigger, developers were also throwing in freebies hoping to convince buyers.