Backed by government policies, positive economic fundamentals, healthy demand and supply, India’s real estate sector is poised for strong growth in 2019. Ease of living, infrastructure development, and technological advancements - all have contributed to a positive outlook in the residential sector. Here's the report of the residential real estate market of Quarter 4 Financial Year 2018-19, focusing on MMR, NCR, Bengaluru, Chennai, Hyderabad, Pune, Ahmedabad, and Kolkata:
The new launches across the above-mentioned top-8 cities increased by 43% Quarter on Quarter with maximum launches being noticed in MMR. While in last quarter 51,687 units were launched, Q4 FY 18-19 resulted in the total launch of 73,716 units. The maximum number of new launches recorded was between the range of ₹ 25 lac – ₹ 50 lac bracket, and the segment accounted for more than one-third of total units launched during the quarter. The sales of 68,225 units were recorded in tier I cities in the March quarter while exhibiting a marginal dip of 2% as compared to last quarter when the sales were 69,830 units.
Five out of eight Tier I cities witnessed a drop in sales this quarter with a maximum drop observed in NCR (9%) followed by Pune (8%) and MMR (7%). On the other hand, the three cities showed an upward trend in quarterly sales with maximum Quarter on Quarter (QoQ) growth witnessed in Kolkata (33%) followed by Hyderabad (13%) and Ahmedabad (4%). Similar to the last quarter, close to 54% of the sales of this quarter was contributed by sub-50 lac segment. The government initiatives support growth in this segment. As a piece of good news for homebuyers, the prices have remained unchanged across the top cities with a reasonably upward movement recorded only in Hyderabad. The unsold units have witnessed a growth of 2% on QoQ while the current unsold across top 8 cities stands at 9,66,591 units.
The sales in these cities have grown by 5% during FY 2019 as compared to FY 2018. MMR has posted the highest sales of 70,794 units contributing 25.5% of total sales in Tier I cities followed by NCR with 54,174 units contributing 19.5% of total sales. In terms of sales numbers, Hyderabad and Kolkata witnessed maximum growth of 20% each followed by Bangalore with a 14% increase. Unfortunately, NCR showed a 13% drop in sales compared to last year. Pune has shown the maximum growth in new launches in Tier I cities followed by Bangalore and Hyderabad. A lot of policy changes resulted in dampening of the market sentiments during FY 17-18. The Financial Year 2018-19 saw some revival in the first quarter but then faced the distress in terms of a cash crunch after the leading infrastructure lender IL&FS defaulted in September 2018. It shook the investor confidence in other NBFCs (Non-Banking Financial Companies) especially the ones focusing on real estate.
Overall, despite a few sales drops, the residential market has floated through, and the new launches and sales are growing with a positive outlook for future expectations.