Flats sales continue to outdo new unit
launches across India
Trend first seen in the first three
quarters of 2016 continued in 4Q16 as well as 1Q17
By Mr. Ramesh Nair, JLL India
For the first time after 2008, residential apartments
sold in all four quarters of 2016 were higher than new units launched. Through
1Q2017 too, this trend continued across India, and is expected to last for
another couple of quarters even as RERA kicks in and businesses prepare for the
implementation of the GST – touted as independent India’s biggest taxation
reform.
With traditional cash flows during a project’s life
cycle changing due to an evolved policy framework and compliance, developers
are busy changing their business models too. This, coupled with slower sales in
recent years, has led to the ongoing slowdown in new unit launches. The
industry is also witnessing consolidation during recent quarters, which is
expected to continue in the coming years.
Source: JLL REIS
Comparing these five quarters, the number of units
sold vis-Ã -vis number of new units launched was the highest in 3Q16 – when it
exceeded new launches by more than 10,000 units at a pan-India level. In 4Q16,
demonetization slowed down speculator activity and from then on, sales have
been largely driven by end users. Developers have rediscovered the value of end
users and have been right-sizing and right-pricing their offerings accordingly.
What’s happening in the cities?
At a city level, the difference between units sold to
units launched is the starkest in Delhi-NCR. Interestingly, the trend is clear
across all the metros – Delhi-NCR, Mumbai, Bangalore and Chennai while the
difference is negligible in Kolkata. Although the number of new unit launches looks
greater than units sold in both Pune and Hyderabad, a closer look reveals the
true picture.
In Pune, even as the units launched reduce marginally
every quarter, these are largely situated in projects along the city’s fringe
areas having smaller configurations. In Hyderabad, launches are expected to
stabilise through 2017 because a significant increase in launches could lead to
unsold inventory piling up. Both these markets are expected to align to the
pan-India trend in one or two quarters.
Source: JLL REIS
In 2008, it was the global financial crisis (GFC) that
hit the developers. This time around, however, there is a new reality wherein
developers are consciously trying to reduce inventory across cities by
gradually reducing the number of launches and markets are maturing due to the
emerging supply-demand realities as well as the changing policy framework.
Mr. Ramesh Nair, CEO
& Country Head - JLL India
For media contact
Arun Chitnis
Head - Corporate Communications & Media Relations
JLL India
Level 6, Amar Avinash Corporate Plaza
Bund Garden Road,
Pune 411001.
Tel: (020) 40196100 Fax: (020) 40196101
Mob: 91 9657129999
Website: www.joneslanglasalle.co.in
Blog: www.joneslanglasalleblog.com/realestatecompass
Arun Chitnis
Head - Corporate Communications & Media Relations
JLL India
Level 6, Amar Avinash Corporate Plaza
Bund Garden Road,
Pune 411001.
Tel: (020) 40196100 Fax: (020) 40196101
Mob: 91 9657129999
Website: www.joneslanglasalle.co.in
Blog: www.joneslanglasalleblog.com/realestatecompass
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