Launches more than double in Delhi-NCR; Bengaluru and Mumbai record 81% and 22% annual growth, respectively
MUMBAI: After a prolonged lull of nearly 3 years, residential markets in the top 3 property markets of Bengaluru, Mumbai and Delhi-NCR have showed signs of recovery in the year 2018. The positive impact of the regulatory reforms including the implementation of RERA and GST is now evident, said a JLL India report.
Number of residential launches across Delhi-NCR, Mumbai, and Bengaluru witnessed a significant on-year rise in 2018. According to JLL Research, Delhi NCR witnessed 114% year-on-year growth in new launches at 17,660 units, which is the highest among the three markets. While Bengaluru recorded annual growth of 81% at 37,286 units, Mumbai’s housing market saw a 22% rise in launches.
While new launches across these 3 key metros recorded strong growth, positive consumer sentiment in the post-reforms regime has resulted in higher sales. In percentage terms, Delhi-NCR topped with 71% on-year growth in sales at 24,725 units. However, the jump in sales was due to low base effect.
Sales in the first half of 2018 continued to be slow in Bengaluru, but it picked up momentum in the latter part of the year, expanding at 17% on an annual basis. Post a consistent drop in sales since 2016, the offtake of residential units in Mumbai revived and grew at 10% during 2018.
“With the supply side likely to remain strong in 2019 and prices remaining stable across the country, the market will be favourable for homebuyers in times to come. While there has been a spurt in residential launches in 2018, a possible rationalisation in GST rates for under-construction properties is on the anvil. These positive developments along with the implementation of RERA are good news for homebuyers,” said Ramesh Nair, CEO and Country Head, JLL India.
The rise in launches has, however, added to the number of years that is needed to sell (YTS) the existing unsold inventory in the three cities. As a result of the higher quantum of unsold inventory and sluggish demand of past few years, housing prices have remained steady across the three markets. The stability in the rates is likely to push the sales momentum in 2019, said JLL India.
New launches more than doubled in Delhi-NCR during 2018, led by heightened activity in Gurugram and Ghaziabad. However, launches continued to be significantly lower than the momentum of around 70,000 units seen in 2014 and 2015. While Noida constituted a majority share in total launches, its share reduced significantly to 39% in 2018 from 65% in 2017.
After a gap of four years, Delhi-NCR recorded robust sales growth of over 70% in 2018 compared to the previous year. However, this is still lower than the sales volume of 2014 and 2015, when the region witnessed sales volume of more than 40,000 units, the report added. Gurugram, followed by Noida-Greater Noida and Ghaziabad, reigned the robust recovery in the offtake of housing units.
In Bengaluru, adequate supply in all price brackets resulted in Hosur Road and Whitefield contributing more than 50% to the overall sales in 2018.
While the micro markets of Thane, Western suburbs I and II including Andheri, Jogeshwari, Goregaon, Malad, Borivali and Eastern suburbs of Ghatkopar, Vikhroli, Kanjurmarg, Mulund continue to form a majority proportion in the overall sales, South Central Mumbai (Parel, Byculla, Matunga,Wadala) exhibited an impressive 53% growth in 2018 driven by a strong surge in sales during January – June period. The area has been facing slackening sales and mounting inventory as demand tapered owing to infrastructure bottlenecks.
Given this steady price scenario, a persistent growth in sales with new launches under control and proper implementation of policy changes will have a significant positive bearing in revitalising the residential market.
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