MUMBAI, March 22, 2018 /PRNewswire/ --
Unsold inventory decreased by 10% from 8.04 lakh units in Q4 2016 to 7.27 lakh units by Q4 2017
Fewer launches, subdued sales and muted property prices defined 2017 for the Indian residential real estate sector, according to a detailed report by ANAROCK Property Consultants.
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With an annual decline of almost 50% in new launches and 15% decline in sales across top seven cities in India, the sector was effectively shattered in 2017.
"A spate of policy reforms and structural changes literally crippled the sector," says Anuj Puri, Chairman - ANAROCK Property Consultants. "Simultaneously and consequentially, it transitioned rapidly into a transparent and buyer-friendly one. With only end-users left to drive the market and investors more or less evaporating completely, developers throttled back severely on new launches to allow the market more scope to absorb the already staggering unsold inventory."
A series of highly disruptive reforms, coupled with mounting unsold inventory and stringent RERA norms, kept developers on the back foot in 2017. Not surprisingly, instead of infusing new supply in the market, developers focused on executing their under-construction projects in order to remain RERA-compliant and remain relevant in the rebooted market scenario.
2017's Depressed New Launch Readings
The top seven cities recorded new unit launches of around 1.26 lakh in 2017 as opposed to 2.50 lakh in 2016.
"In terms of sales during 2017, almost all the cities recorded a decline when compared to 2016- except Hyderabad, which recorded a 21% increase," says Anuj Puri. "The decline in sales can be primarily attributed to weak buyer sentiments amidst the rather confusing new policy environment."
Uninspiring Sales Figures
Restricted new launches in 2017 resulted in a significant reduction of unsold inventory levels across the top seven cities. Overall unsold inventory decreased by 10% from 8.04 lakh units in Q4 2016 to 7.27 lakh units by Q4 2017. An uptick in the traction of ready-to-move-in and nearing-completion properties helped developers to clear a lot of the existing stock.
Prices across the top seven cities remained largely range-bound in 2017, primarily due to the presence of significant unsold stock and cautious buyer sentiments. In 2017, the market clearly made a shift towards the affordable housing segment, with 44% of unit launches (55,000 units) coming in with price tags under INR 40 lakh. This is a major shift in the Indian real estate sector and developers are now visibly aligning their supply with the budget ranges dictated by demand, so as to avoid any mismatch.
The seed of reforms sown in 2017 will doubtlessly reap consummate benefits in the future. Although they caused nothing short of mayhem in the sector, these reforms serve the important purpose of eliminating unscrupulous players from the real estate ecosystem. Moreover, developers are likely to focus squarely on their core business and be customer-centric by launching the right kind of supply at the right prices.
Download the ANAROCK Residential Report 2017 here: http://bit.ly/2HTzeUy
About ANAROCK Property Consultants Pvt Ltd
The ANAROCK Group is one of India's leading real estate services company, having diversified interests across the real estate value chain. With a professional career spanning 27 years, the Group's Chairman - Anuj Puri - is India's most prominent thought leader in the real estate industry. He is regarded as one of the most respected and acknowledged experts on India's real estate opportunities both in India and across the globe.
ANAROCK Group's key strategic business units comprise of residential business; broking & advisory services to clients; investment business: debt, equity and mezzanine funding and research & consulting business. ANAROCK residential business team comprise of industry's finest residential real estate professionals who understand the ever-changing consumer needs and market trends. Our experience and expertise gained through serving some of the most reputed developers, corporate houses, portfolio investors and individual investors make us the unchallenged residential real estate market leader in India. ANAROCK's Investment arm has built a revolutionary business model of bulk-purchasing residential apartment inventory through a proprietary investment fund.
ANAROCK is the coming together of two words ANA - the mathematical fourth spatial dimension symbolizing our firm's four core values of Ethics, Integrity, Transparency and Respect & Trust - and ROCK, the globally understood symbol of solidity and stability. Our vision is to challenge convention and effect positive change across real estate value chain. With a growing team of 1000 professionals, ANAROCK operates in all key property markets across India - Mumbai, Chennai, Bangalore, Gurgaon, Noida, Hyderabad, Kolkata and Pune and an international presence in Dubai. With in-depth market information, quality advice and developer tie-ups for optimal deals, we have been serving the industry since 2011.
ANAROCK is committed to consistently deliver optimal value to our clients from the base of our core promise - Values over Value.
Visit: http://www.anarock.com
Media Contact:
Arun Chitnis
[email protected]
+91-9657129999
Head - Media Relations
ANAROCK Property Consultants Pvt. Ltd.
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