The trend in sales and new launches in Indian real estate remained unchanged during the year 2018. On the contrary, Q1 2019 saw both housing sales and new supply rise due to multiple Government sops in the first three months of 2019.
According to the data, housing sales rose by 12% and new residential supply by 27% quarter-on-quarter due to sops in the interim budget. GST rate cuts and lowering of home loan rates are also seen post-RBI’s recent repo rate cut.
The new supply has resulted in affordable housing with maximum share at 44%. On the other hand, the overall unsold inventory across the top cities saw a meagre 1% decline in Q1 2019 over the previous quarter along with the unsold housing stock standing at 6.65 lakh units as of Q1 2019. Mumbai Metropolitan Region (MMR) and Pune markets performed significantly well despite a 1% hike in stamp duty and registration charges. Housing sales in Pune and MMR saw a maximum increase in the quarter by 24% and 19% respectively and became the top performers. The new housing supply in these two leading cities increased by 160% and 62% respectively.
The sector in housing sales and new supply is currently riding on a new wave of optimism following the triple benefits it received from the Government in the first three months of 2019. These sops are anticipated to increase the sentiments of homebuyers as well as boost the confidence of builders and long-term investors.
MMR, Pune, Bengaluru, and NCR together accounted for 87% of the new supply and contributed majorly to Q1 2019 new unit launches. On the other hand, Kolkata and Chennai saw a decrease in the new launches and supply compared to the year 2018. During Q1 2019, the average residential prices across the top cities remained stagnant except in Bengaluru and Hyderabad, where the average property prices increased by 1% each over the previous quarter and by 2% in a year.
With the slash in GST rates to 5% for premium homes and 1% for affordable homes without ITC (Input Tax Credit), the realty sector looks all geared up in 2019. Hope, the momentum is maintained over the next three quarters of 2019. Another booster shot given by the Government is changing the budget-specific definition of affordable housing and extending it to less than INR 45 lakh. It has resulted in more inventory from the premium budget henceforth being included in the affordable segment category as a significant benefit to buyers.