Buying in housing market in India dropped by 20 per cent quarter-on-quarter amid one of the worst slump the sector has ever witnessed. Indian real estate sector has been unable to stand back at its feet despite several sops from the government. A report from Anarock Property Consultants indicate things could be worsening.
Top 7 cities saw 55,080 units sold in Q3 2019 against 68,600 units in Q2 2019, yearly decline recorded at 18 per cent over Q3 2018, the report said.
The ongoing ‘shraadh’ period – seen as inauspicious in many parts of the country – coupled with the ban on the subvention schemes compounded the quarterly dip. Also, above normal and heavy rainfall impacted the number of site visits resulting in longer decision-making cycle.
New launches were similarly impacted, falling from 69,020 units in Q2 2019 to 45,230 units in Q3 2019, 13 per cent y-o-y decline from 52,130 units in Q3 2018. Kolkata and Chennai developers had lesser drop in sales compared to their peers in other cities. The two cities saw lowest quarterly sales drop of 12 per cent each. Hyderabad on the other hand witnessed highest drop at 26 per cent.
As new projects dropped, overall unsold stock as on Q3 2019 stood at 6.56 lakh units across the top 7 cities, declining by a meagre 1 per cent against the preceding quarter. However, developers were able to shed their overall unsold stock by at least 5 per cent during the year which stood at 6.87 lakh units back in Q3 2018.
Hyderabad, despite of the worst absorption of housing in the quarter, managed to shed maximum unsold stock of 5 per cent in a quarter. Developers seem to be getting better at targeting their projects towards the real needs as 41 per cent new supply of Q3 2019 came from affordable segment, where demand seems to be improving. About 36 per cent supply came from mid-segment (priced ₹40-80 lakh).
Property prices largely remained stagnant across cities. Anarock expects that the recent Government sops to boost sentiment at onset of festive season may increase housing sales in upcoming quarters.
Anuj Puri, Chairman – ANAROCK Property Consultants said, “The decline in new supply and housing sales in this quarter was expected as both homebuyers and developers remained cautious and risk-averse. The slew of economy-boosting measures by the government to spur growth across sectors will very likely give the housing sector a leg-up in the festive season and the ensuing quarters.”