The Indian property market has performed phenomenally well in the last quarter. Be it launching new projects or releasing stocked inventory, cities like Bangalore and Hyderabad have contributed immensely that has increased the level of foreign direct investments as well. With new and promising regulatory bodies put forward by the government, the real estate sector has witnessed a rise in infrastructure development and increase in demand for affordable housing. Prominent property developers are now capitalizing on key markets to fulfill supply and demand shortcomings and cater to individual residential expectations.
Introduction of RERA and tax reforms such as GST
The Indian property market in the past hasn’t performed to its full potential. Expectations were not met which led to delay in project delivery. However, post-2016, the inclusion of regulatory bodies like RERA and tax reforms such as GST has brought about order and purpose in the realty market. This has attracted residents from diverse income level groups to consider investing as any delay in project delivery could result in hefty penalties. Also, the Benami Transactions (Prohibition) Act in 2016 has resulted in more land for the government which can be released in a timely manner to complement the shortage of land for affordable housing spaces. This has eradicated irrelevant and illegal practices and contributed to a healthy Indian realty market.
New residential product launches and sales at an all-time high
With added policies and rise in affordable housing structures, the property market is witnessing a revival. The period from January- June’2019 has seen new residential project launches that have increased by 21% which contributes to 107,143 units. Meanwhile, the sales have grown by a constant and uniform 4% that counts to 133,317 units respectively. These numbers depict the fact that India is heading towards the right direction and the rise in residential property sales is effective in enhancing the national economy multi-fold.
Effective focus on the affordable property market
Current property trends showcase that almost 51% of residential project launches in the period from January- June’2019 have contributed to ticket sales for properties that are priced under 50 Lakhs. Similarly, a whopping 78% of the ticket sales have seen investor interest in properties that are priced under 1 Crore. With developers more inclined and focusing on releasing affordable residential spaces, the demand to supply ratio is balances and improves potential investment perspectives. Even NRI investors are focusing on the affordable property market to own multiple properties that are certain to appreciate over time.
Property market growth in Kolkata, Hyderabad, and Bangalore
Current realty reports state that cities like Delhi NCR and Kolkata have reported a drop in residential unit launches during the phase from January- June’2019. However, the supply provided in cities like Ahmedabad increased to a whopping 157% for the same H1 period. Similarly, metropolitan cities like Hyderabad and Bangalore have performed astonishingly well and has grown by about 47% and 34% respectively.
Inventory stock comparison
Statistics prove that sales per quarter have shown a decrease of 9.3% per quarter at the end of January- June’2019 as opposed to 11.3% per quarter in 2018. This is primarily because the market was witnessing a staggering rise in sales in the previous year in 2018 and minimal stocked inventory. Also, the age of residential inventory which was stocked has decreased significantly which has paved the way for effective strategies to cater to rising demands in the affordable property sector.
3rd consecutive year to record an increase in sales
Taking the Indian property market as a whole, the sales in the period from January- June’2019 has increased by 4%. This signifies that the Indian property market has witnessed a rise in sales and 2019 is the third consecutive year which has contributed to rising residential infrastructure development. Also, Mumbai has recorded the highest percentage of sales in the residential market when compared to other developing cities.
Comparison of retail inflation rates to rise in residential property prices
The last four years have witnessed a phenomenal rise in residential property prices which is below the rate of retail inflation growth. This has encouraged residents to consider investing and grab on to formidable returns on investment. Cities like Hyderabad have grown exponentially in terms of increase in property prices over retail inflation growth, which is a promising prospect in the years to come.
Reduction in unsold inventory- Realty investments made convenient
It is reported that unsold residential inventory across primary markets has reduced and a promising decline of 9% in H1 (January- June’2019). Hyderabad has witnessed a 67% decline in stocked inventory and Mumbai has seen an increase in unsold inventory with an increase of 14% which was the only market to show minimal growth.
In conclusion, noticing the evident growth and minor pitfalls across all major cities, one cannot be oblivious to the fact that the Indian real estate market has proven to be a profitable investment choice for residents from diverse income groups.