Residential launches fall by 16% in Jan-March: report
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Mumbai: Residential project launches in top eight cities in the country have fallen by 16% to around 25,800 units in the first three months of the year as compared to the same period last year, as developers gear up to implement the new real estate law, said Cushman & Wakefield a global real estate consultant.
For the financial year ending 31 March, 2017, launches in the residential sector declined by 8% as compared to the same period previous fiscal, said the report.
“A closer look at the trend indicates that launches have seen a steady quarter–on–quarter (Q-o-Q) decline for the last four quarters, corresponding with the announcement of Real Estate Regulatory Act (RERA) 2016 in March last year and the demonetization exercise in November 2016,” according to the report.
During the financial year 2017, the share of affordable segment in total launches improved to 30% compared to 25% while share of high-end and luxury segments fell to 11% from 13% from the year-ago period.
Anshul Jain, managing director (India) Cushman & Wakefield, said launches are expected to further slowdown in the next two-three quarters as developers focuses on “making intrinsic changes to their business structure, operations and marketing strategies to comply with RERA norms.”
“Consumers would continue to remain restrained in the first half of the year. Further, with mild change in end user sentiments due to news of downsizing in information technology (IT)T/ IT-enabled segment, sales velocity is expected to reduce,” he said.
However, buyer sentiment would see gradual improvement towards the second half of calendar 2017 as the impact of real estate reforms would begin to play out in the market, Jain said.
Capital values of properties in the Delhi-National Capital Region (NCR), Bengaluru and Mumbai, will remain under pressure as the markets readjust in the post RERA and GST regime, he added.
The report also pointed out that the quoted capital values in Delhi-NCR softened by 1-3% in first quarter of 2017 while Bengaluru also witnessed rationalization of prices in most of the submarkets across mid and high-end segments.
“Developers have restricted new launches and are reducing the effective cost of their offerings by bundling in incentives and add-ons to clear the inventory backlog,” the report said. Besides, the ticket size of new launches across top eight cities saw an average decline of 14% year – on – year (y-o-y) in calendar 2016.