Sales of residential apartments jumped 33 percent in India’s top nine cities in the three months ended March as developers continue to exhaust existing inventory, raising hopes of a revival.
The turnaround came after a continuous drop in sales for the last four years, according to a report by property consultant PropTiger. Nearly all cities have shown growth in sales except a decline in Hyderabad and a flat growth in Ahmedabad. Delhi-National Capital Region, India’s largest real estate market, reported the highest growth in sales.
After a stressful 2017, the first quarter of 2018 has come as a breath of fresh air for the residential real estate industry, rekindling hopes of a revival this year, Ankur Dhawan, chief investment officer at PropTiger.com, said. “For the first time in this quarter, we saw developers willing to reduce prices to sell their unsold units and improve their cash flows. We now expect the market to start showing a steady improvement in sales going forward.”
Real estate market in the country has seen a slowdown after the demonetisation hurt the cash-driven sector and the new housing law armed buyers against developers transferring funds from one project to another and failing to meet timelines. That led to a pile-up of existing inventory. Sales are slowly picking up.
Sales jumped 60 percent in Delhi-NCR market, followed by Mumbai and Pune, according to PropTiger. Across the top cities, 79,999 units were sold as against 59,983 units in the year-ago quarter. Ahmedabad remained stagnant while sales fell 30 percent in Hyderabad.
Yet, the demand is only being met from existing stock and fresh projects declined. New launches in India’s top nine cities dropped by 60 percent, with Mumbai seeing the biggest drop of 81 percent.
Developers continue to focus on selling existing projects rather than launching new ones, said the report. Bengaluru, however, bucked the trend with a 50 percent jump in new launches and Kolkata followed witnessed an 8 percent increase.