The residential real estate market across the country saw a 43% year-on-year decline in launches in March. However, sales during the month saw a 10% y-o-y increase.
The launches saw a staggering decline in March amid the uncertainty over GST (goods and services tax) rates as well as the liquidity crisis. This led to an overall fall of 6% y-o-y to 286 million sq feet in financial year 2019.
The real estate market on a pan-India basis clocked sales of 37.3 million sq ft in March 2019, taking the total sales in FY19 to 443 million sq ft, up by 7% y-o-y.
According to a report by Kotak Institutional Equities, declining launches and improving sales momentum have continued to aid the unsold inventory as the all-India inventory decreased 11% y-o-y to 1,230 million sq ft in March 2019. The outstanding inventory is expected to be liquidated in 33 months (based on an average of trailing 12 months), an improvement from 40 months in March 2018.
Prices across the country increased 6% y-o-y to `5,260 per sq ft as against `4,950 per sq ft in March 2018.
Sales activity in Delhi-National Capital Region (NCR) remained steady in March 2019 with sales of 4.3 million sq ft, up by 28% y-o-y with a major contribution of 1.7 million sq ft from Greater Noida and 1.3 million sq ft in Gurugram. The average sales reached 4.4 million sq ft in FY19. Even as launches declined in other metros, it remained steady in NCR at 3.7 million sq ft in the month under review, against the monthly average of 2.5 million sq ft in FY19.
Net unsold residential inventory in NCR stood at 221 million sq ft as of March 2019 and is equivalent to 50 months of sales (based on an average of trailing 12 months). Realisations remained flat y-o-y in March 2019, at `5,055 per sq ft, whereas it increased 4% sequentially.
Launches in the Mumbai Metropolitan Region (MMR) reduced by 49% y-o-y, at 2 million sq ft, in March 2019, due to slowdown of launches in Thane, at 1.2 million sq ft as against monthly average of 2.4 million sq ft in FY19. A decline in launches by 35% y-o-y in Mumbai also contributed to the overall decline.
Despite weak launches, sales remained upbeat at 6.7 million sq ft, up by 17% y-o-y in March 2019, in line with an average of 6.8 million sq ft in FY19. MMR witnessed the sharpest decline in inventories among all the regions, even as the outstanding inventory remains the highest at 272 million sq ft in March 2019. This inventory is expected to be absorbed in 40 months, based on the prevailing past 12 months sales.