New Delhi: Housing sales fell by 41% during January-May period of 2017 at 1.10 lakh units across 42 major cities as property demand continued to be sluggish post demonetisation, according to PropEquity.
Housing sales stood at 1.87 lakh units during the year-ago period.
The real estate market is facing a multi-year slowdown, leading to significant delays in execution of projects, forcing buyers to protest and file cases against developers in courts.
The housing sector got further affected post-demonetisation. However, the affordable housing segment has started to pick up with fall in interest rates and the government's move to accord infrastructure status to low-cost homes and provide interest subsidy.
"Housing sales have declined during January-May period as market continues to be slow post demonetisation," PropEquity founder and chief executive officer Samir Jasuja told PTI.
The launch of new homes also fell 62% to 70,450 units during the first five months of the current year as against 1,85,820 units in the corresponding period of 2016, according to PropEquity, which is an online subscription-based real estate data and analytics platform.
"In the first five months of 2017, the number of residential launches declined as many developers delayed project launches across India due to the impact of demonetisation," he said.
Jasuja said the housing sector went through a critical transition phase post demonetisation with fall in transaction activities.
With implementation of the Real Estate (Regulation and Development) Act, Jasuja said, the delays in project deliveries would go down 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," he said.
On outlook, Jasuja said the housing market will remain slow for some more time till uncertainties related to the goods and services tax (GST) and new realty law settle down.
Last week, minister of housing and poverty alleviation M. Venkaiah Naidu said housing prices would come down with implementation of the GST from 1 July and real estate law, which came into force from May. Builders have to register all ongoing and new projects with state regulators, established under this law.