In a heartening development for Indian real estate, home absorption rates have already doubled in the top 7 cities in India. New residential real estate launches have however come down in January 2018 in comparison to the earlier month as per reports. Yet, absorption has been rising fast with the figure doubling from 250 units seen in December 2017 to a whopping 500 units in January 2018 according to reports. The NCR has seen a positive rise of 28% for real estate sales of housing units that were launched in January 2018 itself.
In a similar trend, the MMR (Mumbai Metropolitan Region) has also seen an increase of 11% in real estate sales. Hyderabad has also shown an increase of 10% in sales volumes for residential units. The increase has been relatively lower in Chennai and Pune which have witnessed absorption going up by 3% and 4% respectively. However, the trend still augurs well for Indian real estate since most of these absorptions were driven by housing units that were launched in the very same month itself. With several new reforms and policies introduced by the Central Government, the country is steadily witnessing an economic revival and the rapid alignment of the real estate sector to these reforms is playing a vital role in boosting buyer confidence. The real estate sector should witness more stability going forward, particularly with growing levels of absorption and lower stock of unsold inventory in tandem with the lower rates of interest on home loans.
Another trend is also working wonders for the real estate sectors in major Indian metros where real estate developers are first trying to lower their unsold housing stocks by offering the most attractive prices and other freebies before focusing on launching new projects. 2018 promises to be a stellar year for end-users who are planning to buy new homes. Investors should be more patient since they will require more growth to be positive about the appreciation potential of Indian real estate. The end user to investor ratio is presently around 70:30 as per reports and this shows the changing market trends.
2017 has witnessed several drastic measures which have impacted the Indian economy such as RERA and GST while the after-effect of demonetization was also felt in Indian real estate. However, there has been more transparency, financial and performance linked accountability and discipline throughout various business sectors including real estate. The economic growth for the country could be anywhere between 7-7.5% for 2018 as per reports which may outstrip even China according to experts. This augurs well for the growth of Indian real estate which has steadily been on the revival path over the last year.
The overall performance of the sector was muted in the last year on account of the lengthy transition to a more organized way of doing business and the changing regulatory scenario with new reforms being implemented. These major reforms are however increasing buyer confidence and making it safer for people to invest in real estate. This will play a part in drawing more investors from across the globe and boost real estate transactions going forward according to market experts. 6, 600 housing units were added in December 2017 across the 7 top cities in India. 5, 500 units were added in January 2018 as per reports. This meant a decline of 17% overall. New launches in major cities like Hyderabad and the NCR (National Capital Region) were on the slower side for January 2018. However, new launches did increase in the MMR (Mumbai Metropolitan Region) and Bangalore.
However, this reduction in new launches is majorly attributed to the emphasis put by real estate developers on finishing existing projects and offloading their current inventory in place of launching new realty ventures.
