Residential sales in top 8 cities grew 13% in 2017-18: Report

Affordable housing continued to be the mainstay of the demand as the contribution of this segment to the overall sales in tier I cities

MUMBAI: Residential sales across top 8 tier I cities of India has grown 13% during the financial year 2017-18 (April-March) with Mumbai Metropolitan Region witnessing maximum growth of 25%, showed data from Liases Foras Ratings & Research.

Affordable housing continued to be the mainstay of the demand as the contribution of this segment to the overall sales in tier I cities including Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad stood at 18% during the fourth quarter.

The government has been pushing affordable housing through various schemes and incentives. Lower home loan interest rates and necessary impetus by the government to affordable housing has played a key role pushing sales in this segment.

The government has supported the housing sector through affordable housing fund, lower Goods & Services Tax (GST) rates, increased tenure of loans under Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) and extended income tax benefits to apartments of carpet area of 645 sq ft.

Mumbai was followed by Delhi-National Capital Region with 19% increase in sales for the year. In south zone, Chennai and Bangalore have shown a slow down with sales numbers showing a drop of 15% and 5%, respectively while Hyderabad witnessed a growth of 17%.

On year-on-year basis, new launches across these top 8 markets have declined in most cities except in Mumbai, Hyderabad and Kolkata where launches grew 42%, 53% and 29%, respectively.

With a growth in sales and drop in new launches the unsold inventory in the tier 1 cities have dropped by 3% from a year ago to 9.29 lakh units as on March end.

During the fourth quarter ended March, residential sales across these tier I cities increased by 14% with Hyderabad emerging as the leader with a 33% increase followed by Bangalore with 30% rise, MMR with 19% growth and 14% increase in Pune. Kolkata is the only city that witnessed a marginal decline of 1%.

During the fourth quarter, sales in affordable segment with price tag of less than Rs 25 lakh increased 24% from a year ago. Sales in the cost bracket of Rs 25 lakh to Rs 50 lakh increased by 4% on an annual basis. Sales in the cost bracket of Rs 50 lakh to Rs 1 crore increased by 17%, while sales in luxury segment with Rs 1 crore to Rs 2 crore rose 13%. Sales in ultra-luxury segment above Rs 2 crore rose 13%.

Weighted average price across tier I cities witnessed a muted increase of 1%. Marginal decline of 1% was observed in Pune and NCR while prices dropped by 4% in Chennai. Prices in Ahmedabad witnessed no change while a slight increase of 1% was observed in Hyderabad , Kolkata , MMR and Pune each, the data showed.

NCR led with the highest contribution to sales in the affordable segment with 26% followed by MMR with 23%, Ahmedabad with 20% and Pune with 15% of total sales in this segment. All 8 cities cumulatively sold highest in cost range of Rs 25 lakh – Rs 50 lakh, with sales of 35% of total sales, followed by cost range of Rs 50 lakh to Rs 1 crore at 30% of total sales.

Among regions, MMR contributed the highest to overall sales at 17,143 units or 25% of total sales followed by NCR at 15,326 units or 22% of total sales, the data showed.

During the quarter, MMR added the highest new launches, with a contribution of 25% followed by Bangalore 17% and NCR 11%. Among various cost segments, the cost bracket of Rs 50 lakh to Rs 1 crore witnessed maximum new launches amounting to 39% of total new supply followed by the cost brackets of Rs 25 lakhs to Rs 50 lakhs with 36% contribution.

The Rs 50 lakh to Rs 1 crore segment of MMR witnessed maximum launches of 5,545 units contributing 11% of the total new launches across eight tier 1 cities. Kolkata contributed 29% of the new launches in the affordable segment with less than Rs 25 lakh followed by MMR 25% and Pune 24%.

Source : https://realty.economictimes.indiatimes.com/news/residential/residential-sales-in-top-8-cities-grew-13-in-2017-18-report/64256679?photo_id=59863844

Affluent Buyers - Premium Housing to Gain Momentum in 2015

Even though the overall realty space was under the grip of slowdown, the higher-end segment always bucked the trend.

Driven by the fast pace of urbanization, higher disposable incomes, new offerings and greater influx of NRIs, the premium housing segment has evolved significantly over the past few years in India. So much so that even though the overall realty space remained under the grip of slowdown during this period, the higher-end segment was always seen bucking the trend.

While the residential real estate did well in 2014 in terms of absorption of right-priced properties, luxury residential real estate fared well in specific cities like Mumbai, Delhi, and Bangalore. And, according to some experts, that trend is likely to continue even in 2015.

“Selective luxury projects, backed by developers who have the delivery track record and credibility in the seven major cities, will do well in 2015. Thus, not all projects will do well as almost every developer has either launched or is in the process of launching luxury projects,“ Om Ahuja, CEO (residential services) of JLL India, said. Delivering a luxury project is not easy and requires a strong track record and excellent execution teams for timely delivery, Ahuja said. What is more, even the supply of higher end homes is likely to moderate in 2015, as developers will now stop focusing excessively on higher-end offerings.

Therefore, while smaller, yet better designed and more efficient homes, will define the residential real estate market in 2015, the supply of luxury homes will moderate to align with the slow demand dynamics for these offerings, a JLL India study said. Some industry experts, however, are still upbeat on the growth prospects for luxury housing in 2015.

Neeraj Bansal, partner (and head of real estate and construction) at KPMG, India, says that India's luxury housing market may grow at the rate of about 30-35% in the short to medium term.

"This market, which is about 5-6% of the total real estate sector, is witnessing strong interest from investors, especially in Mumbai, Delhi, Gurgaon and Bangalore. Besides, formation of a strong central government, improving consumer sentiments and attractive schemes offered by developers - like possession-linked plans, freebies, and gifts on bookings - are driving interest from domestic HNI investors as well as NRIs, which will give it a big boost going ahead", Bansal says.

A Harikesh, senior VP (marketing and sales) of Tata Housing Development Company, says: "With fast-growing urbanization and influx of global lifestyle trends, more and more affluent buyers now want their homes to reflect their financial and social standing. Demand for penthouses, for instance, has been increasing in cities like Bangalore, Delhi, Chennai, Kolkata, Mumbai, and a few others. Attributing to international flavors, housing and living concepts, Indian buyers today keep raising the bar in residential projects."

The requirements, however, may vary from hilltop residences to riverside apartments.While some are opting to live in luxury homes in the suburbs, others are definite that their homes must be `smart' or eco-friendly.

Source: PropertyatNeoDevelopers.Wordpress.Com