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8/10/2019

The Ride So Far In Real Estate Of India 2019

With the completion of the first half of 2019, the real estate market along with government policies proved to be a good investment option for the end-users. Here are some hits and misses in the property trends observed until now this year.

Prices fall for residential properties

Besides Hyderabad, all cities in India witnessed a fall in housing prices or the rise in prices was low. With the ongoing scheme of Pradhan Mantri Awas Yojana, developers would continue to offer affordable housing to the home seekers.  

GST Council lowered GST Rate

Reducing the GST rate from 8% to 1% for affordable housing, 12% to 5% for others and eliminating Input Tax Credit (ITC) has helped improve buyer perception. However, these changes have hit the profitability of the suppliers and developers hiked prices to compensate for the loss ITC.

The impact of rate cuts

With an intent to kick start the investment cycle, and stimulate demand, RBI slashed rates. It has helped but less than what was expected. The repo rate was cut by 75 bps but only about 35 bps cut was transmitted to borrowers. 

Ready to move properties preferred more

The urban part of India consists of developments both as under-construction and ready to move. Builders are catering to the various requirements of buyers. Given the high cost of capital and a slow rise in prices, the trend shows that buyers prefer ready-to-move-in properties more than under-construction ones. 

Builders playing safe after the imposition of RERA

With RERA and other policies introduced by the government in real estate, the prices and timely construction of the properties have remained under check. With such transparency brought in the sector, Buyers are now investing more and more in the properties. At the same time, builders now set realistic goals and focus on completing their ongoing projects rather than launching many projects.

Let's take a look at the first half of 2019  - A report by real estate research firm Knight Frank

The real estate market in Delhi NCR

In Delhi NCR, new launches, sales, and the prices of the properties rose steadily. With a decline in inventory, it will take more than three years to clear if sales continue at the same pace. 

  • Price: Rs 4,400 per ft/ Rs 47,362 per m

  • 12-Month price change: 3%

  • 6-Month price change: 4%

  • Unsold units: 1,30,001

  • 1-year change: -18%

  • Age of inventory (QTRS): 19

  • Quarters needed to sell this: 12.9

The real estate market in Mumbai MR 

Despite the highest property prices in the country and RERA imposition, Mumbai saw a rush in new launches in the past year. The inventory has risen and it will take more than two years to clear if sales continue at the same pace. 

  • Price: Rs 7,115 per ft/ Rs 76,591 per m

  • 12-Month price change: -3%

  • 6-Month price change: -1%

  • Unsold units: 1,36,525

  • 1-year change: 14%

  • Age of inventory (QTRS): 15.5

  • Quarters needed to sell this: 8.5

The real estate market in Pune 

A large number of new projects have been launched in the past year in Pune and unsold units have reduced marginally. Prices have declined but remain moderately high. 

  • Price: Rs 4,304 per ft/ Rs 46,327 per m

  • 12-Month price change: -4%

  • 6-Month price change: -2%

  • Unsold units: 31,650

  • 1-year change: -15%

  • Age of inventory (QTRS): 12.9

  • Quarters needed to sell this: 3.8

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