Real Estate Market
Update Q3 2019 : Residential
Residential market resilient despite economic slowdown
2018 witnessed the residential market move towards revival, after taking a massive hit in 2017. Residential sales grew by 42% Y-o-Y with 137,000 units sold in 2018. The momentum continued in the first nine months of 2019 with sales increasing by 14% compared to the same period last year. However, sales are yet to match the levels achieved in the pre-demonetisation era, when January to September of 2016 witnessed an offtake of nearly 120,000 units. This indicates the innate growth potential that the residential market has if consumer sentiments improve further.
On the supply front, launches have remained muted decreasing by 9% in the first three quarters of 2019 as compared to the same period last year. The liquidity crunch which was triggered by the IL&FS crisis continues to prolong developers’ decision to launch new projects. Thus, they have been focusing on timely delivery of already launched projects and clearing their unsold inventory.
Residential sector inching towards revival
Source: Real Estate Intelligence Service (JLL), (Figures in number of units). Note: Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata. YTD – January to September 2019.
The upcoming festive quarter is expected to see a pickup in sales as potential homebuyers typically effect home purchase decisions during this auspicious period. Developers also dole out lucrative schemes and freebies to attract fence-sitters. Additionally, demand is likely to remain concentrated in the affordable and the mid-price segments and buyers will continue to be inclined towards ‘nearing completion’ and ‘ready to move in’ properties in the backdrop of fears over timely deliveries.
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