Luxury home launches double in December quarter
NEW DELHI: Luxury housing seems to be the flavour of the season with its share in overall home launches more than doubling to 25% in the December quarter last year compared to 12% in the previous quarter, shows a report from property portal PropTiger.
In terms of sales also, the luxury housing segment, comprising homes with price above Rs 1 crore, has been witnessing consistent increase across nine major cities of Ahmedabad, Bengaluru, Chennai, Gurgaon, Hyderabad, Kolkata, Noida, Mumbai and Pune. The segment’s share in overall sales rose to 29% in December quarter last year (Q3FY16), from 23% in Q2FY14.
Sales across nine major cities increased for the first time in last 10 quarters, from 49,000 units in Q2FY16 to 53,000 Q3FY16, according to the report named Realty Decoded.
“This trend reversal indicates that the worst could be over for real estate residential market. At least, the downside, if any, should be limited from here onwards,” said Dhruv Agarwala, chief executive officer and co-founder, PropTiger.com.
Sales of new projects launched within six months grew much faster at 23% quarter on quarter, compared to 3% for projects more than six months old.
“Moreover, if GST and real estate regulatory bills get a nod from Parliament, it is expected to restore consumer confidence in real estate, further triggering the expected revival,” he added.
The affordable housing segment, comprising homes below Rs 50 lakh, continued to be the hot pick, acocunting for more than half of the total sales in Q3FY16. The share, however, declined over the past 10 quarters, from a high of 58% in the Q1FY14 to 52% in Q3FY16.
About 626,359 were unsold in the top nine cities at the end of December last year, with Mumbai, Bengaluru and Noida accounting for about 60% of the share.
However, the total inventory overhang, or the time required to clear the total inventory at the current pace, decreased by two months to 35 months, backed by increased sales over the quarter.
Ready to move in homes comprised just 5.5% of the total unsold inventory implying larger confidence towards ready-to-move-in apartments on account of ‘nil’ construction risk.
New home launches in Q3FY16 decreased 47% compared with same quarter last year to 42,269 units, however, it increased by 15% against the previous quarter.
Prices have increased marginally across the cities, excluding NCR towns. “Even for other cities, if adjusted for inflation, might be a negative change,” the report added.
Bengaluru has clocked the most price appreciation rising by 13% over the last 10 quarters, while Hyderabad is catching up closely at 12%. Still at 5% compounded annual growth rate, even these are below inflation.