MUMBAI : A slew of measures initiated by the government such as interest subvention on affordable housing, steps to eradicate black money and prop up end-user demand for residential real estate are translating into better sales in the country's top-8 cities, indicating a revival in growth, several reports by property consultants and research firms have suggested.
Residential sales across top 8 cities of the country have increased 6% on a sequential basis in the second quarter taking the total growth to around 28% post demonetisation last year, showed data from Liases Foras Real Estate Rating & Research.
The sequential growth assumes significance as the rise was recorded after the 21% increase witnessed in the last quarter. This is despite the disruption of implementation of Re a l E s t at e ( Re g u l at i o n & Development) Act, 2016, and goods & services tax (GST). On an annual basis too, the rise in sales stood at 4% during the quarter.
Another recent report by Knight Frank India had also showed that residential sales, led by affordable housing, have gathered pace and have shaken off the woes of demon etisation. While sales across top eight cities during the first half ended June are down 11% on-year, they have risen by the same proportion when compared with JulyDecember period that was marked by the demonetisation shock, Knight Frank India said.
According to Liases Foras, Mumbai Metropolitan Region (MMR) constituted 24% of the overall sales in tier I cities, recording the highest number of sales at 15,824 units -this is the highest sales figure the region has clocked in the past seven years. This is also the third best performance of the region ever in terms of sales after June 2009 when it had registered 21,000 units, and September 2009 when it saw 17,000 units being sold.
“Post-Lehman crisis, market had corrected almost over 30% and had adjusted itself to see more affordable home launches. Similar feat is being repeated, albeit this time the adjustment is more through time correction as the prices have remained stagnant for the last three years. In addition to this, we are again seeing good amount of affordable home launches spurred by the government initiatives,“ said Pankaj Kapoor, managing director of Liases Foras Real Estate Rating & Research.
In the Union Budget 2017, the government accorded infrastructure status to affordable housing segment. On New Year's eve, Prime Minister Narendra Modi had announced the government's decision to provide interest subvention of 3% and 4% for loans of up to `12 lakh and Rs 9 lakh, respectively, under the Pradhan Mantri Awas Yojna.
Country's largest mortgage lender HDFC saw Individual loan disbursements growing 21% during the quarter ending June. The average size of loans stood at `26.3 lakh, an indication of the rising prominence of affordable housing demand.
According to Keki Mistry, Vice Chairman & CEO of HDFC, post demonetisation, the individual disbursement growth trajectory began normalizing during the first quarter ending March.
“Given that interest rates are lower and property prices have not moved up for long, homebuyers are showing keen interest in buying houses on the back of incentives provided by the government,“ Mistry said. Mortgage lender Indiabulls Housing Finance also witnessed a 39% on-year jump in its loan disbursements for the quarter ended June after recording 28% growth in the preceding quarter.Over the past one year, housing loan interest rates have eased over 100 basis points and this has also prompted homebuyers to act.
While sales have been improving, supply numbers are easing due to slower pace of new launches.Inventory levels across tier I cities de creased to 44 months in the June quarter from 47 months in the previous quarter.
However, it still re mains far away from the desired 8-10 months market inventory indicating continued stress on pric ing hereon. Prices are likely to remain sub dued, which would rather help in improving sales volumes.
Affordable segment with properties priced below `25 lakh across the eight cities contributed to 17% of overall sales compared with 16% in the previous quarter. MMR recorded maximum sales in the affordable category at 24% of total sales followed by Pune at 22%.Sales in the cost bracket of `50 lakh to `1 crore increased marginally by 1%.
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Source - realty.economictimes.indiatimes.com
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