- New supply across top 7 cities up by 27% q-o-q – from 55,600 units in Q4 2018 to 70,490 units this quarter; defies conventional election period trends
- Pune and MMR see max. quarterly rise in both housing sales and new supply; absorption in Pune rose by 24%, in MMR by 19%
- Bengaluru frontrunner in shedding unsold stock; sees 9% decline in Q1 2019 over previous quarter & a 27% yearly fall
- New affordable housing supply sees over 47% q-o-q jump – from 20,800 units in Q4 2018 to 30,750 units this quarter
- Annual housing sales rise 58%, new launches up by 91% across the top 7 cities
Defying previous election year trends when sales and new launches remained muted during this period, Q1 2019 saw both housing sales and new supply rise due to multiple Government sops in the first three months of 2019. ANAROCK Property Consultants’ data shows thathousing sales rose by 12% and new residential supply by 27% q-o-q due to sops in the interim budget, GST rate cuts and lowering of home loan rates post RBI’s recent repo rate cut.
Of the total new supply, affordable housing saw the maximum share at 44%. However, overall unsold inventory across the top cities saw a meagre 1% decline in Q1 2019 over the previous quarter. Unsold housing stock stands at 6.65 lakh units as of Q1 2019.
Pune and MMR were the top performers with new housing supply increasing by 160% and 62% respectively. Housing sales in these two leading Western region cities saw a maximum increase in the quarter by 24% and 19% respectively.
“While we anticipated a negative spill-over impact of the NBFC crisis in the first quarter of 2019, housing sales and new supply assumed an upward trajectory,” says Anuj Puri, Chairman – ANAROCK Property Consultants. “The sector is currently riding on a new wave of optimism following the triple benefits it received from the Government in the first three months of 2019. These sops have not only increased homebuyers’ sentiments but will also boost the confidence of builders and long-term investors.”
“Despite a 1% hike in stamp duty and registration charges in Maharashtra, MMR and Pune markets performed significantly well as far as new launches and housing sales are concerned,” says Puri. “With project approvals in place, builders in these regions had been waiting for an opportune time to launch their projects, and the prevailing upbeat buyer sentiments was a major kickstart.”
Q1 2019 New Launch Overview:
The top 7 cities recorded new unit launches of around 70,490 units in Q1 2019 (as opposed to 55,600 units in Q4 2018) – a quarterly increase of 27%
- Key cities contributing to Q1 2019 new unit launches included Mumbai Metropolitan Region (MMR), Pune, Bengaluru and NCR, together accounting for 87% of new supply
- Approx. 17,520 units were launched in Pune – a whopping rise of over 160% from Q4 2019. More than 45% of new supply was added in the affordable segment
- MMR added approx. 26,850 units in Q1 2019 – a significant quarterly increase of 62% over the previous quarter. More than 70% new supply was added in sub INR 80 lakh price bracket.
- Hyderabad added fresh supply of 4,850 units in Q1 2019 (compared to 3,940 units in Q4 2018), increasing by 23%
- Bengaluru added 9,070 units in Q1 2019 – a quarterly decrease of 22%. Approx. 64% new supply was added in sub INR 80 lakh price bracket.
- NCR new launches recorded a drop of 9% from the previous quarter with approx. 8,030 units launched in Q1 2019
- Chennai added 3,170 units in Q1 2019 – a decrease of 19% over the previous quarter
- In Kolkata, new launches recorded a massive drop of 75% from the previous quarter, with approx. 1,000 units launched in Q1 2019. The city saw the least new supply in the quarter among the top 7 cities.
| City-wise New Supply (in units) and Q-o-Q percentage change | |||||
| Cities Name | Q1 2019 | Q4 2018 | %Change (Q4 2018 vs Q1 2019) | Q1 2018 | %Change (Q1 2018 vs Q1 2019) |
| NCR | 8,030 | 8,800 | -9% | 4,540 | 77% |
| MMR | 26,850 | 16,590 | 62% | 9,490 | 183% |
| Bengaluru | 9,070 | 11,610 | -22% | 7,320 | 24% |
| Pune | 17,520 | 6,730 | 160% | 2,750 | 538% |
| Hyderabad | 4,850 | 3,940 | 23% | 3,680 | 32% |
| Chennai | 3,170 | 3,900 | -19% | 2,720 | 17% |
| Kolkata | 1000 | 4,030 | -75% | 6,470 | -85% |
| Total | 70,490 | 55,600 | 27% | 36,970 | 91% |
Source: ANAROCK Research
The ripple effect of the NBFC crisis Q4 2018, coupled with the usually slow pre-election sentiment, could have played spoilsport for both new launches and housing sales in Q1 2019. However, the Government’s various interventions have had not only a buffering but a boosting effect. Working closely with the RBI, it has been successful in curtailing the liquidity crisis in the sector.
On a yearly basis, new launches across the top 7 cities together saw a 91% jump in Q1 2019 against the corresponding period in 2018. Similarly, housing sales saw a yearly increase of over 58% in the top cities – led by MMR, Pune and NCR with an increase of over 95%, 80% and 52% respectively.
Q1 2019 Overall Sales Overview:
Around 78,520 units were sold in Q1 2019 with NCR, MMR, Bengaluru and Pune together accounting for 84% of the sales.
- Pune recorded the highest jump in sales in this quarter as compared to other top cities. City sales increased by 24% – from 9,940 units in Q4 2018 to 12,340 units in Q1 2019 due to a significant increase of 160% in new launch supply.
- MMR came in second with a significant jump in sales in Q1 2019 as compared to the other top cities. City sales increased by 19% – from 20,220 units in Q4 2018 to 24,010 units in Q1 2019.
- Sales in NCR and Hyderabad increased by 8% each over the previous quarter with 13,740 units and 5,400 units respectively.
- Sales in Bengaluru and Chennai increased by 5% and 4% respectively over the previous quarter and were recorded at 15,580 units and 3,430 units respectively
- Kolkata sales rose by 4% – from 3,860 units in Q4 2018 to 4,020 units in Q1 2019.
| City-wise Absorption (In Units) and Q-o-Q percentage change | |||||
| Cities Name | Q1 2019 | Q4 2018 | % Change (Q4 2018 vs Q1 2019) | Q1 2018 | % Change (Q1 2018 vs Q1 2019) |
| NCR | 13,740 | 12,730 | 8% | 9,070 | 51% |
| MMR | 24,010 | 20,220 | 19% | 12,300 | 95% |
| Bengaluru | 15,580 | 14,820 | 5% | 11,690 | 33% |
| Pune | 12,340 | 9,940 | 24% | 6,850 | 80% |
| Hyderabad | 5,400 | 4,990 | 8% | 4,050 | 33% |
| Chennai | 3,430 | 3,290 | 4% | 2,420 | 42% |
| Kolkata | 4,020 | 3,860 | 4% | 3,420 | 18% |
| Total | 78,520 | 69,850 | 12% | 49,800 | 58% |
Source: ANAROCK Research
Despite the increase in launches and overall absorption in the top 7 cities during Q1 2019 over the previous quarter, overall unsold inventory decreased by a meagre 1% – from 6.73 lakh units in Q4 2018 to 6.65 lakh units by Q1 2019. The yearly decline was over 7% – from 7.13 lakh units in Q1 2018 to 6.65 lakh units in Q1 2019. Bengaluru witnessed the highest reduction in unsold inventory by27% from Q1 2018 to Q1 2019.
Pricing Trends
Average residential prices across the top cities remained stagnant in Q1 2019 when compared to the previous quarter – except inBengaluru and Hyderabad, where the average property prices increased by 1% each over the previous quarter and by 2% in a year.
All in all, the realty sector looks all geared up in 2019. The slash in GST rates to 5% for premium homes and 1% for affordable homes without ITC gives the beleaguered realty sector the much-needed breathing room and will certainly help in maintaining forward momentum over the next three quarters of 2019.
Also, the booster shot given by the Government by changing the budget-specific definition of affordable housing and extending it to <INR 45 lakh has resulted in more inventory from the premium budget henceforth being included in the affordable segment category – a major benefit to buyers
