Mumbai: The number of apartments sold has exceeded supply over the last more than one year for the first time since the global financial crisis in 2008, as developers went slow on new launches and focused on clearing their existing inventory across India, according to property consultant JLL India.
The data was for the whole of 2016 calendar and the first quarter of 2017 calendar.
As per data compiled by JLL, the number of units sold in the third quarter of calendar 2016 exceeded new launches during the period by around 10,000 units at a pan-India level, the highest in the last five quarters. This trend is expected to last for another couple of quarters as new real estate regulations kick in and businesses prepare for the implementation of the goods and services tax (GST).
“In 2008, it was the global financial crisis that hit the developers. This time around there is a new reality wherein developers are consciously trying to reduce inventory across cities by gradually reducing the number of launches...,” said Ramesh Nair, chief executive officer (CEO) and country head, JLL India, in a note released on Monday.
New policy changes and framework coupled with slower sales in recent years have also led to slowdown in new unit launches, he said.
At a city level, the difference between units sold to units launched is the starkest in Delhi-NCR, followed by Bengaluru, Chennai and Mumbai, while it is negligible in Kolkata.
However, in Pune and Hyderabad, new launches are much higher than sales.
While the number of new unit launches has reduced marginally every quarter, in Hyderabad, launches are expected to stabilise through 2017 because a significant increase in launches could lead to unsold inventory piling up. Both these markets are expected to align to the pan-India trend in one or two quarters, Nair said, adding that in the fourth quarter last calendar year, demonetisation slowed down speculator activity and from then on, sales have been largely driven by end users.