Knight Frank report finds 6% housing sale growth among 8 major Indian cities in 2018

On account of developers reducing prices of their residential inventories and offering indirect discounts to attract customers, property consultant Knight Frank India has revealed in its report released on Monday that housing sales rose six percent in 2018 in eight major cities — Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad and Ahmedabad, Kolkata and Pune.

The report further reveals that sale of residential units increased in six cities — Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, and Ahmedabad; but declined in two cities — Kolkata and Pune. Higher sales volumes resulted in the drop in the number of unsold units by 11 percent to nearly 4.7 lakh units.

 Compared with other property consultants, Knight Frank has reported the lowest rise in housing sales during 2018 at 6 percent. 

JLL India said housing sales rose 47 percent in seven cities, ANAROCK data suggested 16 percent rise in seven cities, and PropTiger showed 25 percent rise in sales in nine big cities.
The difference in the figures is on account of variation in locations in the respective reports.

"An improving regulatory environment, reducing prices, indirect discounts and an increasing infusion of residential products that are more in tune with the homebuyers' preferences have culminated in a six percent year-on-year (YoY) growth in sales during 2018," Knight Frank India said.

Sales volumes in 2018 were estimated to be 2,42,328 units as against 2,28,072 units in the previous year.

Bengaluru saw the highest annual increase in sales of 27 percent YoY in 2018, riding on the back of economic stability and job security, the report said. 

The NCR market saw sales improve by 8 percent YoY in 2018, on the back of stronger sales traction in Noida and Greater Noida. 

Sales declined in Kolkata (-10 per cent) and Pune (-1 per cent) in 2018, against 2017.

"The total unsold inventory levels have improved at the end of 2018 and are estimated to be 4,68,372 units, which were lower by 11 percent since the end of 2017 and close to 30 percent lower than 2016," the consultant said. 

The launches of new homes rose sharply by 76 percent to 1,82,207 units in the eight cities covered in the report.

 Knight Frank India CMD Shishir Baijal said, "The residential market in 2018 recorded a recovery after seven years, which has been led by the affordable segment".

The incentives from the government such as lower GST rates and infrastructure status to affordable housing have fuelled the demand in the sector, he said. 

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The supply side has accordingly calibrated itself in this period.

"Having said that, the non-banking financial companies' (NBFC) crisis created a liquidity crunch in the second half of 2018, which restricted sales, particularly in Mumbai and NCR in H2 2018," Baijal said.