The Indian real estate market is looking positive after one and a half years of challenging environment that hogged the real estate sector. There was a lot of confusion in the market post-demonetisation which was followed by the implementation of Real Estate (Regulation and Development) Act (RERA) and then GST. As per the latest half yearly H1 2008 (January to June 2018) Knight Frank India Real Estate Report there has been a significant rise in residential launches and office records robust growth in the H1 2018 time frame.
“Both demand and supply in the market got affected due to the different reforms that had started with demonetisation, then RERA and GST. The real estate market in India was reinventing itself due to these reforms. However, things are changing now. In the residential space we witnessed that there was a significant jump in the new launches which showed a 46 per cent YoY increase. Another interesting trend was that these launches mainly were concentrated at the lower ticket size and 51 per cent of the total supply in the residential space was concentrated under the Rs 50 lakh ticket size,” said Shantanu Mazumder, Senior Branch Director, Bengaluru, Knight Frank India.
As per the report, in the residential space, Mumbai and Bengaluru were the largest markets in the country and accounted for 56 per cent of the total supply during H1 2018. “These markets experienced a significant rise in the share of units launched in under Rs 10 million and Rs 5 million respectively over H1 2016. On the other hand, Mumbai saw the maximum growth in launches at 128 per cent YoY while NCR and Pune saw more than 75 per cent growth. At the same time, price drop intensified in Mumbai, Pune and Kolkata at 9 per cent, 8 per cent and 8 per cent respectively. Effective price drop of 10-15 per cent continues in cities like Mumbai, NCR, Pune and Kolkata. However, we observed that Hyderabad bucks the trend with an exceptional price growth at 8 per cent YoY,” added Mazumder. He also observed that a lot of price correction has already happened in the real estate sector in India and it is not expected to correct further in the immediate future. He also said that there was also a significant decrease in unsold inventory in cities such as Mumbai and Bengaluru.
As per the Knight Frank report, in the office space Pune experienced the maximum growth in transactions at 118 per cent and Bengaluru continued to clock the highest transaction numbers. In the office space, Mumbai saw maximum space come online while the NCR saw the most YoY growth in office supply. Interestingly, in the office space most Indian cities experienced strong positive rental growth. Another interesting trend in the office space was that the co-working service providers account for 13 per cent of total transacted space that is now an emerging trend.
London headquartered Knight Frank is an independent global property consultancy and has more than 15,000 people operating from 418 offices across 60 markets. The group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. In India, Knight Frank is headquartered in Mumbai and has more than 1,000 experts spread across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad.