Residential sales surge by 25% in H1 2018: CREDAI JLL Report

Residential sales surge by 25% in H1 2018: CREDAI JLL Report

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CREDAI, the apex body of real estate sector released joint reports with India’s leading International property consultant, JLL at the CREDAI NATCON 2018. The CREDAI-JLL report pointed at significant increase in sales velocity, recording a rise of 25% y-o-y with sales at over 64,000 units.

Highlights:

· 25% y-o-y rise with sales of over 64,000 units

· Mumbai leads sales volume by over 13,600 units, 11% increase to H1 2017

· Bangalore follows with 13,300 units

· Delhi – NCR record sales of over 10,000 units, up by 26% y-o-y

· Kolkata and Hyderabad top percentage chart for y-o-y growth in sales recording 280% and 180% respectively

· 64,080 units sold in H1 2018 compared to 51,452 in H1 2017

 

According to CREDAI-JLL estimation, the demands aimed at providing further impetus to the growth of the real estate sector amidst the positive trends on investments and residential housing. The growth witnessed in H1 2018 can be attributed to two large factors, firstly returning buyers’ confidence on account of implementation of RERA in most states and stable capital values that have started to show an upward bias. The general consensus amongst the buyers has been that the markets have bottomed out and capital values are now expected to move northward. These two factors, have pushed many fence sitters and new home buyers to take the purchase decision. This is despite the fact that the RBI has increase its REPO rate in the third monetary policy making borrowing for home loans dearer.

Mumbai saw the highest sales volume totaling to over 13,600 units in H1 2018. Bangalore followed closely with 13,300 units and recorded a marginal increase of 2% in sales y-o-y. Pune, which also saw a minor increase of 2%, in sales volume recorded at approximately 10,000 units. Both these markets saw steady trends closely mirroring the market activities from H1 2017.

Delhi – NCR saw a rise of 26% y-o-y in sales owing to rise in new launches and returning confidence in the market. The market saw sales of over 10,000 units. Kolkata topped the percentage chart for y-o-y growth in sales to record a rise of 280% (albeit on lower volume) in the first half of 2018. Hyderabad too recorded significant y-o-y activities with sales volume rising by over 180% in H1 2018. Both Kolkata and Hyderabad markets had seen very limited buying activities last year, thus making the sales volumes of H1 2018 stand out significantly.

Ramesh Nair, CEO & Country Head, JLL India said, “The significant turnaround witnessed in the first half of 2018 was a much awaited boost to the residential sector. End user confidence in market has strengthened on account of timely completion, implementation and adherence to RERA laws, good governance leading to accountability and transparency in the system. NATCON 2018 comes at an opportune time and aims at deliberating on the dependence of the brand equity of developers on these factors, with insightful sessions planned through the event.”

NATCON 2018 saw over 1000 member developers and experts from the real estate sector, senior professionals from the financial world and ancillary industries participatein the three-day long convention aimed at facilitating best practices and learnings, stressing on the importance of real estate as one of the building blocks of a nation’s economy. The participants included key capital market players from India and around the world, leading companies and Government officials. CREDAI also put forth robust demands for incentivizing developers to participate in affordable housing to continue the growth momentum. Some of the demands were enabling tax benefits to projects registered prior to 1st June, 2016, reducing land area utilization to 50%, a 12% GST with ITC and 2/3rd land rebate in metro cities, Development Rights (DR) in Joint Development Agreement (JDA), redevelopment agreements and Transfer of Development Rights (TDR) exempt; Housing loan interest deduction against ‘Rental Income’ for self-occupied property increased to Rs. 5,00,000 for realising the Government of India’s vision of “Housing For All”.

Speaking on the occasion Jaxay Shah, President – CREDAI said, “World’s fourth largest economy – Germany is a great example of how old and new coexist which has also contributed to its housing boom. And, we feel that Indian Real Estate is nurturing the same potential with growth at challenging times every day – making India an even powerful economy. CREDAI NATCON 2018 is an effort in this direction to learn and relearn the global best practices to optimize this opportunity the industry presents. While, there has been significant improvement in the market sentiment, it yet needs Government support for relaxation in certain norms. At CREDAI, we will continue to work with the relevant authorities to drive its growth.”

Getamber Anand, Chairman – CREDAI added, “Whether it’s creating an inclusive environment for women, young developers, skill workers or consumers or facilitating an ecosystem which is technologically and regulatory robust, we are breaking stereotypes every day. The CREDAI – JLL report’s finding that sales have risen 25% y-o-y, makes it evident that we’ve succeeded in nurturing an ecosystem of growth in Indian real estate. With this year’s theme we shall continue to enable a thriving ecosystem, and celebrate and analyse the power to benefit all the stakeholders including millions of homebuyers and homeowners.”

Satish Magar, President Elect – CREDAI said, “CREDAI has set benchmarks and showcased strong commitment in paving the way for the growth of Real Estate sector in implementing the policy changes and paving the path towards Indian realty’s growth. The effort has helped in the revival of the sector, evident from the CREDAI –JLL report, and laid a strong foundation for the future. NATCON is another step demonstrating our efforts to transform the sector and bring their issues at the centrestage.”