Mumbai: Home launches have fallen 19.46% across top eight cities in the first three months of 2017 to 22,897 units compared to the same period last year, as most developers focused on clearing existing inventory, said a report by PropEquity, a real estate data and research firm
Unsold inventory dipped slightly by 3.12% to 471,855 units from 487,043 units, the report said. “Overall, the fall in demand and new launches of residential projects slowed down in the first quarter of the year as impact of demonetisation on the real estate sector tapered down faster than the expectations,” it said. The study was conducted in Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru and Chennai.
Housing demand across these key cities declined by around 1.2% at 28,131 units during the period. According to the report, prices on an average fell by 1.67% across the eight cities as developers were able to finally sell their earlier inventory and focussed on delivering earlier projects before the Real Estate Regulator Act kicks in later this year.
“Real estate sector in India, especially housing is going through a critical transition phase post demonetisation as transaction activity has slowed down. Many buyers, sellers, banks and private equity investors are waiting for the sector to tide over volatility in the market,” Samir Jasuja, founder and chief executive officer (CEO) of PropEquity.
Jasuja said with the implementation of the new real estate regulations, there would be delay in project deliveries as developers rush to complete previously launched projects to avoid penalties.
“We strongly believe that developers with good track record, strong financials and low leverage to external debt are expected to perform better in the current environment, ” Jasuja said.
The report said cities with significant inventory overhang have seen negligible new launches during the first three months. “This reflects a clear approach by developers to clear off existing inventory before they launch new projects. All NCR Cities i.e. Gurgaon, Noida along with Mumbai and Chennai exhibit this trend,” it said.