New project launches, sale of new houses up across India, but muted in Delhi-NCR: Report

Launches of new housing projects and sales of houses increased across the country in the first quarter of this year due to sops announced by the government in the interim budget, rationalisation of GST rates, and lowering of home loan rates, said a report released on Friday.

The report, by real estate consultancy Anarock, said the overall market witnessed 27% growth in the launch of residential projects compared to the first quarter of last year. There was also a 12% increase in the sales of new houses in the country’s major markets, as compared to last year.

However, real estate markets in Delhi-NCR, including Gurugram, witnessed fewer launches of new projects and sales of new houses were below the country average.

The report said new launches in NCR recorded a drop of nine percent from the previous quarter, with approximately 8,030 units launched in Q1 2019.

Sales in NCR recorded an increase of only eight percent compared to this period last year, with 13,470 units.

“NCR has been affected by project delays and stuck projects. In recent years, it also built up a staggering burden of unsold inventory, which has only just begun to be cleared. Historically a speculative market, NCR is now aligning itself to the actual genuine end-user demand and also delivering right-sided projects. However, there will be a longer lag for this market to revive because of its many issues in the past,” said Santhosh Kumar, vice-chairman, Anarock Property Consultants.

The report further said that average residential prices across the top cities remained stagnant in Q1 2019, as compared to the previous quarter, except in Bengaluru and Hyderabad, where average property prices increased by one percent each over the previous quarter and by two percent in a year.

Real estate experts in Gurugram said that slowdown of launches in Delhi-NCR could be attributed to inventory , already lying with builders, and a large number of incomplete projects that they are trying to complete. “There is also a funding crisis being faced by developers, as banks have tightened financing norms and buyers are also not showing much interest due to election season,” Sanjay Sharma, a real estate consultant, said.

Brokers, meanwhile, said buyers in the city were more interested in buying plots and floors rather than investing in new projects. “There has been an upswing in the sale of plots in HSVP sectors and private colonies, but a return to apartments will take some time,” Pankaj Tomar, a broker, said.