The Indian real estate segment appears to be on a recovery path as the residential realty sales grew by 6 per cent in 2018 compared to the previous year, according to a report by Knight Frank. The total sales of residential units across the country were estimated to be close to 242,328 in 2018. Interestingly, in the residential space, the total number of new units launched in the year 2018 was estimated to be 182,207 higher by 75 per cent when compared to 2017. During 2018, the office space leasing reached a historical high of 46.8 million square feet in the commercial segment. These estimates are part of the 10th edition of Knight Frank India’s half-yearly report—India Real Estate. The report has an analysis of the residential (across eight cities) and office (across seven cities) realty market performance for the period from July-December 2018 (H2 2018).
“The year saw the highest ever annual transaction volumes in 2018. At the same time, real estate businesses are now considering RERA as part and parcel of their business and especially, Mumbai and Pune are ahead in terms of RERA implementation. The report observes that the confidence of developers is back in the market. We have also observed that 60 per cent of the total supply in the residential space is mainly below the Rs 50 lakh price range which is the affordable segment and that is what is driving and will drive the market. The report also points out a reduction in the number of unsold inventory across markets,” said Shantanu Mazumder, senior branch director-Bengaluru, Knight Frank.
As far as the cities are considered, the report concluded that Mumbai (38,390 units), Pune (18,580 units) and Bengaluru (11,830 units) saw the highest new residential unit launches in 2018. During the year, the Mumbai market saw the highest year-on-year (YoY) growth of 220 per cent, while Pune recorded nearly a 157 per cent increase. “A full-fledged RERA in both these cities in Maharashtra, coupled with the reprieve from dumping ground ban in Mumbai, facilitated the growth in new launches. In the year 2018, most markets recorded moderate growth in prices. While Mumbai prices fell by 7 per cent, Hyderabad prices vaulted by 7 per cent YoY in 2018. At the same time, Pune (-3 per cent), Kolkata (-4 per cent) and Chennai (-3 per cent) recorded a moderate correction in prices. There was a marginal increase in real estate prices in the NCR (+2 per cent), Bengaluru (+2 per cent) and Ahmedabad (+1 per cent) during the same period,” added Mazumder.
The report also mentioned that Bengaluru market saw the highest annual increase in sales by 27 per cent YoY in 2018, due to economic stability and job security, and the NCR saw sales improve by 8 per cent YoY in 2018, due to the stronger sales traction in Noida and Greater Noida. During the period, Kolkata (-10 per cent) saw a decline in sales in full year 2018 over 2017. The total unsold inventory levels have also reduced across market at the end of 2018 and are estimated to be 468,372 units which is lower by 11 per cent since the end of 2017 and close to 30 per cent, lower than 2016.
