After a long slump that started in 2013, the real estate sector may be headed for a revival
New Delhi, October 23: After a long slump that started in 2013, the real estate sector may be headed for a revival. While consumer sentiments are still depressed, signs of recovery seem visible if one looks close enough. According to a research by JLL India, a global real estate services firm, there has been a continuous uptick in the residential market since 2017 and by this year, some of the top-tier cities have already surpassed the pre-demonetisation sales levels.
Anuj Puri, Chairman, ANAROCK Property Consultants, concurs and says that despite depressed consumption sentiment, the top-seven cities -- Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune -- saw homes worth around Rs 1.54 Lakh Crore sold in the first three quarters of 2019, an increase of 16 per cent over last year when it was around Rs 1.33 Lakh Crore.
An analysis by Clicbrics, a real estate platform, also indicates that demand for residential properties has increased by 15-30 per cent this festive season, especially in Tier-I cities, where a majority of buyers are preferring ready-to-move-in units. And as per ANAROCK, nearly 81,300 unsold homes are currently ready-to-move-in across the top-seven cities to meet that uptick in demand. Demand for properties has also increased by 20-30 per cent in Tier-II cities, according to Clicbrics.
The slump in real estate started somewhere in 2012, coinciding with what most experts termed as policy paralysis which continued till 2014. Residential activity slowed down and sales started plummeting. 2014 registered a 16 per cent dip in sales from 1.48 lakh units to 1.24 lakh units. By 2017, this had declined to 72,300 units due to demonetisation which was followed by other reforms like RERA and GST.
“The result was a sharp slump in sales to the extent of 40 per cent in the first nine months of 2017 when it dipped to 72,300 units. The signal of revival witnessed in 2016 was thus, lost again,” an analysis by JLL India points out.
It added that one overlooked trend has been the continuous growth in residential sales post 2017 amidst the slowing economy and subdued consumer sentiment with residential sales reaching 1.15 lakh units in the first nine months of 2019.
“However, the recovery has been gradual and the quantum of sales is still a tad below the 2016 levels. The sales volume seen in 2013 could well be achieved in the next few quarters,” it said.
“The sales at the aggregate level are still lower than the 2016 threshold but Mumbai, Hyderabad and Pune have breached the mark. Barring Kolkata and Delhi NCR, others are following suit,” it added.