PropTiger report reveals the reason behind residential sales slowdown
Cities in Maharashtra, namely, Mumbai and Pune led the growth pack showing more than 50% improvement in sales year on year.
Indian real estate sector may have several reasons to worry about, the but the latest PropTiger report has brought some cheer to them. In its report titles ‘Realty Decoded Report’ for Q3 FY’19, PropTiger.com, part of Elara Technologies Pte Ltd, said that a total of 73,691 units were sold in Q3 FY’19 in the top 9 cities, which is 8% lower as compared to 79,894 units sold in Q2 FY’19. However, compared to last year (YoY basis), the sales have improved in all the cities other than Gurugram, which witnessed a slowdown due to non-approval of affordable housing projects.
Cities in Maharashtra, namely, Mumbai and Pune led the growth pack showing more than 50% improvement in sales year on year.
Ankur Dhawan, Chief Investment Officer, PropTiger.com said that liquidity crunch caused by the snowballing of the IL&FS issue was one of the key reasons behind the slowdown in the quarter.
“The growth momentum typically seen during festival seasons was not seen during the last season due to the liquidity crunch caused by the snowballing of the IL&FS issue, which slowed down home loan disbursals and new sanctions by large Home Finance Companies. However, if we compare the numbers with the same quarter of FY’18, sales are 30% higher which is good news for the industry,” said Dhawan.
The report claimed that launches at the national level improved by a mere 3% year on year, primarily due to a 48% drop in new launches in Mumbai. Cities where launches improved significantly include Bengaluru, Gurugram, Chennai and Pune.
Reduced launches and improved sales brought down unsold inventory by 10% to 7,99,081 units. Inventory overhang has decreased to 31 months as compared to 34 months from last quarter. Ahmedabad has the highest inventory overhang of 45 months followed by Kolkata at 41 months. Hyderabad witnessed the lowest inventory overhang of 20 months followed by Chennai and Bengaluru at 22 and 24 months respectively.
The study covered nine key Indian cities of Mumbai, Pune, Noida, Gurugram, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
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