Lowest first-half sales and launches in the last 5 years, resurgence of affordable housing in H1 2017 – Knight Frank Report
~H1 2017 vacancy levels lowest since the Global Financial Crisis, IT/ITes sector takes a hit~
Kolkata, July 5, 2017: Knight Frank India leading Realty market Analysis today launched the seventh edition of its flagship half-yearly report – India Real Estate. The report presents a comprehensive analysis of the residential (across eight cities) and office (across six cities) market performance for the period January – June 2017 (H1 2017).
Launches crash 41%, lowest in seven years. Sales volume down by 11% YOY, lowest first-half sales in the past 5 years . The residential market had barely come out of the demonetisation shock when the need for RERA compliance put breaks on a large section of new projects. Barring Chennai new projects dried up in all the eight cities.
When we asked about the cause for slowdown and depreciation of secondary sales market post demonetization which had impacted not only the new sales but also the resale market badly. The spokesperson agreed to the view that not getting the desired level of initial funding due to lack of buyers for resale properties is one of the major concern.
NCR and Ahmedabad were worst hit with launches plummeting by 73% and 79% respectively.
Sequentially, Mumbai picks by close to 62%, albeit lower by 36% YOY.
Chennai was the only market to record a marginal 4% YOY rise in launches .
Sales down by 11% YOY but up by the same margin over the demonetisation-hit H2 2016.
Government thrust towards affordable housing, widespread discounts on ready inventory and improved sentiments among buyers courtesy RERA drive sales volumes. .
H1 2017 witnesses the resurrection of affordable housing across India with 71% of the launches under the INR 50 lakh price segment up from 52% during the same period last year.
NCR, Kolkata, Pune and Ahmedabad drive the revival of affordable housing projects with around 80% of launches in these cities in the sub INR 50 lakh segment.
At 596,044 units, unsold inventory was at the lowest across the eight cities in H1 2017, albeit owing to the shrinking market size. NCR was the worst market with over 4 years of inventory. There has been a surge in inventory in the ‘ready for possession’ category.
Knight Frank LLP is an estate agency, residential and commercial property consultancy founded in London by John Knight, Howard Frank and William Rutley in 1896. Knight Frank together with its New York-based affiliate Newmark Grubb Knight Frank is one of the world’s largest global property consultancies.
Its global network encompasses 370 offices in 55 countries and more than 12,000 employees handle in excess of US$817 billion (£498 billion) worth of commercial, agricultural and residential real estate annually.
How ever company is hopeful that real estate is a sector which will turn around and will get the desired dividend to the investors.