In a bid to clear off massive unsold housing inventories, builders are holding back on new launch projects. During the March quarter of 2018, real estate developers across top nine Indian cities launched only 27,800 new units, compared to 69,489 units in Jan-March last year. This is a 60% drop from the previous year. However, beating all odds is Bangalore, which has in fact seen a jump in new launch projects, followed by Kolkata. If the latest report from a popular property portal is to be believed, there has been a 50% jump in new launches in Bangalore and 8% in Kolkata. Can this be an effect of RERA?
This shows a major trend in Indian real estate where builders continue focusing on selling existing projects rather than building new ones. However, the Bangalore story is different. The major factor that has influenced new launch projects in the city is the demand from IT and ITeS sector. This enhanced market performance is also because of Bangalore’s thriving startup ecosystem, excellent education & medical care facilities, and rapidly improving social infrastructure. Bangalore is also leading on the absorption front with 15 % rise in sales and a total of 127 percent rise in launches.
According to ANAROCK Property Consultants’ Chairman, Anuj Puri, Bangalore’s real estate market has received a major boost from positive buyer sentiments, increased commercial activities and improved job opportunities. The market here is largely driven by the end-users who were, until now, in a wait-and-watch mode. Due to Bangalore’s fast improving market fundamentals, the buyers are back and fully active. There has been an upsurge in the overall sentiment. During January-March, the city’s unsold housing stock declined by almost five per cent to only 91,000 units.
Thus, in terms of supply and absorption, Bangalore is truly leading the way. Mumbai has had the worst quarter in new launches, with an 81 percent drop compared to January-March 2017, reports Financial Express. The report considered new launches from Ahmedabad, Kolkata, Chennai, Bangalore, Gurgaon, Noida, Pune and Mumbai. Realty experts firmly believe that the slug in supply of new apartments is because of RERA and GST implementation across the country. Demonetization also affected launches significantly.
| City | Decline % | Down by no. of Units |
|---|---|---|
| Pune | 66% | 3,370 from 9,936 |
| Noida | 66% | 1,553 from 4,531 |
| Gurgaon | 52% | 2,666 from 5,501 |
| Mumbai | 81% | 5,296 from 27,257 |
| Chennai | 24% | 2,266 from 2,996 |
Under the new RERA guidelines, all real estate projects must be registered with the regulator before marketing and launching them. Unlike new supply of units, housing sales have gone up across by 33% in the eight cities mentioned. The March quarter number stands at 80,000 units.
