Indian property sector adjusts to new normal
The Indian residential market recorded an annual increase in both supply and demand from January to June 2019, its third half-yearly period of increase in a row, according to the latest data from Knight Frank India.
The number of units launched across the country in the first six months of the year swelled to 111,175, up 21 percent from the first half of 2018. Sales reached 129,285 units or an increase of four percent from last year, while unsold stock stood at 450,263, down nine percent from the same period last year.
“This has been largely based on the volumes generated in the affordable housing segment that has seen a host of incentives under the Housing for All by 2022 programme,” explained Shishir Baijal, chairman and managing director of Knight Frank India.
Both the sales and supply numbers hit their highest level since the demonetisation drive instituted by the government in the second half of 2016.
The relatively healthy numbers come amid new realities brought by measures like the Goods and Services Tax and the Real Estate (Regulations and Development) Act, which have effectively stymied speculative behaviour in the market and prioritised home ownership among owner-occupiers.
Despite the liquidity crunch caused by Non-Banking Financial Companies (NBFC), end-user sentiment has been stable, thanks to BPI cuts as well as the reduction of GST tax rates to one percent of an affordably priced unit.
“The developers’ community is coming to terms with this new normal and beginning to stabilise and find its footing as can be seen by the recovery in the volume of apartments launched since H1 2019,” said Baijal.
Developers have not only been focusing on affordable housing projects but also lowering ticket sizes. Fifty-one percent of launches in H1 2019 had prices under INR5 million (USD73,000) while 10 percent fetched INR10 million.
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