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4/29/2019

The Report Of Q4 FY 2018-19 For Residential Real Estate Market

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.

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