How is India’s residential real estate market looking? Two reports released this week has some good news for homebuyers. Prices aren’t swinging much – in fact, they are barely rising in most cities. Although the Real Estate (Regulation and Development) Act or RERA is yet to settle down in many states, there is possibly some impact in terms of higher homebuyer confidence.
Property consultancy Knight Frank, in its January to June 2019 India Real Estate report, mentions the slow pace of implementation of RERA. About 41,680 projects have been registered; only 18,000 cases are disposed. The top three states where cases have been disposed are Uttar Pradesh (33 per cent share in the numbers of cases disposed), Maharashtra (21 per cent) and Haryana (17 per cent).
The consultancy listed several reasons why RERA is going slow: Lag in development of user-friendly RERA portals for consumers; many state level RERA portals are yet to make quarterly updates of developers; among key markets, Gujarat, Delhi and Telangana are still functioning with an Interim Real Estate Appellate Tribunal impacting the pace with which the dispute redressal machinery works; West Bengal yet to adopt RERA.
Nevertheless, the first half of 2019 saw good growth in new project launches, which implies that RERA’s implementation, even though imperfect, is making an impact. Knight Frank said most markets posted modest year-on-year growth in sales during the first half of 2019. Launch of new units grew 21 per cent Y-o-Y to 107,143 units while sales inched up 4 per cent to 133,317 units. The market is skewing towards affordable units – 51 per cent of the launches were in the ticket sizes under Rs 5 million (Rs 50 lakhs) and 78 per cent under Rs 10 million (Rs 1 crore).
The consultancy also reported sustained price drop in Mumbai, Pune, Chennai and Kolkata at 3 per cent, 4 per cent, 3 per cent and 2 per cent, respectively. “Including freebies, the ‘Effective’ price drop in double-digits continues in above cities. Hyderabad is the exception at 9 per cent Y-o-Y growth,” the report stated.
ANAROCK Research, meanwhile, stated that residential real estate activity remained largely tepid during the second quarter of 2019 in the backdrop of the general elections. Housing sales, it reported, fell by 13 per cent across the top seven cities in the second quarter of 2019 over the previous quarter. However, on a yearly basis, housing sales jumped 12 per cent; new launches increased 36 per cent during the same period.