Home sales and new launches declined sharply in nine major cities across India during April-June, though demand may recover in the coming months because of sops announced in the Union budget, said a report by real estate advisory firm PropTiger.
According to the report ‘Real Insight Report’ by PropTiger, part of Elara Technologies Pte Ltd, home sales fell 11% year-on-year in the nine cities including Mumbai and Bengaluru to 71,957 units in the June quarter. New residential launches nearly halved, declining 47%, during the same period to 37,852 units, the report said.
Elara Technologies Pte Ltd also owns realty portals - Housing.com, Makaan.com, and FastFox.com.
Home sales in Noida saw the sharpest decline, falling 56%, followed by Ahmedabad and Bengaluru where sales declined by 36% and 17%, respectively. Gurugram bucked the trend with a 32% increase in home sales during June quarter.
The report also pointed out that as developers exercised caution awaiting the result of the general elections, announced in May 2019, new launches declined across all the nine cities barring Gurugram.
“Tough liquidity conditions continue to force developers to keep their guard on and exercise caution with regard to new launches, which is a prudent approach in a difficult environment," the report said.
According to Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com, Makaan.com, Fastfox.com, despite the decline in home sales in the first quarter of fiscal 2019-20, demand is likely to recover in the coming months on the back of several favourable measures announced in the Union budget.
“The budget has offered relief to homebuyers by increasing the tax deduction limit on the interest payable on home loans to ₹3.50 lakh for affordable homes that should drive demand in that segment. Additionally, several banks have lowered interest rates after the RBI reduced the repo rate to a record low. We are confident that these measures are likely to stimulate home sales in the coming quarters," Agarwal said.