CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm today said that the much-awaited recovery in the residential sector has already started with seven major markets in the country already witnessing an increase in quarterly new launches in Q1 2019.
According to CBRE South Asia Pvt Ltd, recovery in this sector was led by increased activity in the mid-end segment; followed by affordable and high-end projects.
The upswing in residential real estate also closely followed the stabilization of key policy reforms such as demonetizationand implementation of GSTand RERA. The positive impact of these reforms resulted into new launches and sales rising with anannual increase of about 11% and 19% respectively in 2018.In fact, 2018 also recordedsales to be marginally higher than new launches, which in itself indicatessigns of a long-term revival.
“The much-awaited growth in the residential market is very much visible now and metro cities such as Delhi-NCR, Mumbai, Chennai, Hyderabad and Bengaluru are showing healthy signs of recovery. The sector has become more end-user driven and developers are increasingly factoring in the requirements of consumers,” said Anshuman Magazine, Chairman & CEO – India, South East Asia, Middle East & Africa.
Besides, the broad stabilization of capital values and increasing disposable income havealso created a suitable environment for the recovery of the residential sector.
Talking about the status of new projects and impact of key reforms, he added,“While we have witnessed a rise in developer interest on launching new projects, the focus still remains on completing ongoing projects and offloading existing inventory. The impact of RERA is evident in the timelines that are being committed by developers – these are more in line with market realties, thereby allowing end-users to plan their home purchases more effectively.”
Interestingly, with affordable and mid-end housing segments coming into greater focus, certain smaller/local developers also continue to launch projects across cities. The positive influence of the past year in the residential sector is also expected to continue in 2019, with developers continuing to align themselves to the recent structural reforms.
Key growth factors noticed in the last quarter:
- Projects by reputed builders launched in several cities, including peripheral locations
- The unsold inventory levels have dropped with developers focusing more on completing projects than new launches
- Sales are now driven by end-users than mere speculative investors
- Factors such as developer profile, project specifications, quality, pace of construction and execution capabilities have come into sharper focus
- Affordable, mid-end / high-end segments are likely to drive both sales and launches in the short to medium-term
Residential Market – At A Glance:
Q1 2019:
- New supply inched up by 14% q-o-q to reach 33,000 units in the 7 major markets.
- Sales balanced supply, with more than 33,000 units sold during the quarter; up by 3% q-o-q.
- Mumbai, Chennai, Bangalore and Delhi-NCR were the dominant markets, with a share of almost 70-75% in both new launches and sales.
- Capital values were mostly stable in both high-end / mid-end and premium / luxury segments.
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