Real Estate Recovery: Home Sales Rise Despite Fall In Launches, Says JLL Report

The real estate market, which saw a raft of reforms in the last two years, continues to recover as home sales rose in the first half of 2019 despite fewer launches.

Sales of residential units across India increased 22 percent year-on-year in January-June 2019 to 78,247 units, according to a report by real estate consultancy JLL titled ‘Residential Market Update–H1 2019'.

Hyderabad saw the highest growth in home sales during the period. Mumbai, Delhi NCR and Bengaluru accounted for over 60 percent of the total sales, the report said.

“A series of reforms and rising buyers' interest in the segment have propelled the sector to align itself to the market demand,” the report quoted Ramesh Nair, chief executive officer and country head of JLL India, as saying.

“In most cities, homebuyers continue to focus on ready-to-move in projects and those nearing completion. As a result of this shift in buying preference, developers, too, are focused on completing their ongoing projects,” he added.JLL

Besides, progressive government policies such as lowering of Goods and Services Tax rate on affordable housing may boost sales, the report said.

• The share of affordable and mid-income housing—ticket size of up Rs 1 crore in Mumbai and Rs 75 lakh in other cities—has seen a hike of up to 58 percent at the country level.
• Pune topped the list with 91 percent of the new supply falling in the affordable and mid-segment category. It was followed by Chennai and Bengaluru.

New Launches

With developers focusing on delivery of already-launched projects, new launches of residential units fell 11 percent year-on-year across Delhi NCR, Bengaluru, Mumbai, Kolkata, Chennai, Hyderabad and Pune, the report said. Mumbai, Delhi NCR and Bengaluru together formed three-fourths of the overall launches during this period, it said.

“Limited number of launches by developers, in a way, is helping the sector to balance the demand supply scenario in the country. This will act as a cushion and help the sector revive,” Siva Krishnan, managing director (residential services, developer solutions, and strategic consulting) at JLL, said in the report.

“And as a result of the reform measures, more specifically Real Estate Regulation and Development Act (RERA) and GST, we expect more transparency in the sector which in turn will bring back buyers' confidence,” the report quoted Krishnan as saying.

Prices, too, remained stable across key locations as developers kept a check on supply and focused on delivery of existing projects, the report said.