Bengaluru sees 16% dip in housing sales in June quarter

Technology capital Bengaluru has witnessed 16% decline in sales of residential units for the second quarter of calendar year 2019. For the quarter ended June, the city witnessed sales of 13,150 units compared to 15,580 units sold during the first quarter ended March 2019.

According to data released by independent property consultant Anarock Property Consultants, Bengaluru stood at the second position behind Hyderabad in terms of maximum decline in housing sales. Hyderabad witnessed a higher drop of 18% quarter-on-quarter at 4,430 units compared to 5,400 units in March quarter. Bengaluru is followed by Pune, which saw 15% drop in sales at 10,490 units as against 12,340 units in March quarter.

The tepid movement in real estate activity during the quarter was largely on account of the general elections during the period. But the recent Union Budget sops for the affordable sector may give the much-needed push to the segment henceforth, Anarock said.

Overall, the top seven cities accounted for sales of 68,600 units compared to 78,520 units, a Q-o-Q decline of 13%. NCR, MMR, Bangalore and Pune together accounted for 84% of the sales in the quarter, Anarock Research said.

New launches dip too

Nationally, the June quarter also witnessed a 2% decline in new launches at 69,000 units compared to 70,480 units in the first quarter. Four of the top 7 cities - NCR, Bengaluru, Chennai and Kolkata saw an increase in new launches. Though by a minuscule margin, it was the first time since 2016 that new launch numbers outstripped housing sales in a given quarter.

Bengaluru added 11,010 units in the second quarter, a growth of 22% over 9,060 units added in the first quarter. Of the new supply, 28% was added in the affordable housing segment. Kolkata witnessed the highest growth of 164% in new supply at 2,640 units as against 1,000 units in the March quarter.

“Housing sales and new launches usually reduce before and during the general elections period. However, on a yearly basis, housing sales jumped by 12% in Q2 2019 over Q2 2018, while new launches increased by 36% during the same period. Going forward, with a stable government in power, residential activity is likely to pick momentum in the coming quarters. Though new launches saw a 2% quarterly decline in Q2 2019, and affordable housing supply fell by 20% against the previous quarter, the luxury category (priced Rs 2 crore – Rs 5 crore) saw supply increase by a whopping 60%, led by Hyderabad and NCR,” said Anuj Puri, Chairman, Anarock Property Consultants.

The government’s Budget ‘bonanza’ for affordable housing – an additional Rs 1.5 lakh income tax deduction on interest paid on home loans availed till March 2020 - will incite builders to increase their supply in this category so as to attract first-time home buyers. Thus, there could be an increase in supply in this category in the coming quarters, Puri said.

Paradoxically, however, the prevailing high property prices within the municipal limits of the major cities prevent builders from launching affordable housing projects there, while lack of basic infrastructure facilities in the peripheral areas – where housing within Rs 45 lakh could be developed – discourage buyers.