Housing sales rose 6% in calendar year 2018 in eight major cities as developers reduced prices and offered indirect discounts to lure customers, property consultant Knight Frank India has said in its latest report. Sale of residential units increased in six cities — Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad and Ahmedabad — but declined in two cities — Kolkata and Pune.
Higher sales volumes resulted in a drop in the number of unsold units by 11% to nearly 4.7 lakh units. “An improving regulatory environment, reducing prices, indirect discounts and an increasing infusion of residential products that are more in tune with the homebuyers’ preferences have culminated in a 6% year-on-year (y-o-y) growth in sales during 2018,” the Knight Frank India report said.
Sales volumes in 2018 were estimated to be 2,42,328 units against 2,28,072 units in the previous year.
Bengaluru saw the highest annual increase in sales of 27% y-o-y in 2018, riding on the back of economic stability and job security, the report said.
The NCR market saw sales improve by 8% y-o-y in 2018, on the back of stronger sales traction in Noida and Greater Noida. Sales declined in Kolkata (-10%) and Pune (-1%) in 2018, against 2017.
“The total unsold inventory levels have improved at the end of 2018 and are estimated to be 4,68,372 units, which were lower by 11% since end of 2017 and close to 30% lower than 2016,” the consultant said. The launches of new homes rose sharply by 76% to 1,82,207 units in the eight cities covered in the report.
Knight Frank India CMD Shishir Baijal said, “The residential market in 2018 recorded a recovery after seven years, which has been led by the affordable segment.”
The incentives from the government such as lower GST rates and infrastructure status to affordable housing have fuelled the demand in the sector, he added. The supply side has accordingly calibrated itself in this period.
“Having said that, the non-banking financial companies’ (NBFC) crisis created a liquidity crunch in the second half of 2018, which restricted sales, particularly in Mumbai and NCR in H2 2018,” Baijal said.