Demonetization was a major hit for the real estate sector followed by the introduction of measures like RERA and GST. However, things seem to be changing now with clear revival signs observed through various studies and reports. These indicate that for the first half of 2018, sales volumes of property and new launches in the Indian real estate sector have touched their highest threshold ever since demonetization. The highest transaction volumes in 6 years were observed for the half-yearly period this year in case of the office property market.
Transaction volumes have also gone up by around 13% in key Indian markets and the highest number of transactions have been observed in Bangalore. For the first 6 months of the year, launches are almost 50% higher as compared to the same period a year earlier. Around 92, 000 housing units have been launched for H1 2018. 74% of these new launches are housing units which are sold for lower than Rs. 75 lakhs as per reports.
This indicates affordable housing markets gaining centre stage in cities like Bangalore and Mumbai which account for a whopping 60% of newly launched units and also the NCR (National Capital Region) which witnessed a 90% increase in new launches to around 9, 000 units. Bangalore witnessed growth of 22% in sales volumes with more than 25, 000 units sold in H1 2018. Mumbai and the NCR saw growth of 1% and 5% respectively. 50, 000 units were cumulatively sold across both these markets.
The average lifecycle of a project is still 6 years in the sector. Prices are still correcting to a large extent in key markets which remains a major attraction for homebuyers. Hyderabad saw 8% of price growth as compared to the last year while prices came down by 9% and 8% in Mumbai and Pune. NCR prices remained stable. In the first half of 2018, almost 21.5 million sq. ft. was bought in the office space segment. However, supply levels of Grade A office space are still lower in comparison to overall demand.
