Indian realty sector regains momentum, says report

The real estate sector in the country seems to have bounced back that sales have risen in this quarter after ten quarters of decline, states a report published by real estate advisor Prop Tigers.

According to the report, Indian realty sector witnessed sales of 53,000 units in the third quarter of the current fiscal compared with around 49,000 units in the second quarter.

“While total launches increased against the previous quarter, new launch sales within these grew much faster at 23 per cent as compared with three per cent of old projects,” states the Realty Decoded-Q3 FY16 report published by independent online real estate advisor PropTiger.com.

Affordable housing segment (below Rs 50 lakh) continued to be the hot pick in the sector with more than half of the sales of apartments in this segment and this has been so even in the previous quarters.

“The share, however, has declined over the past 10 quarters, from a high of 58 per cent in the first quarter of FY14 to 52 per cent in Q3 FY16,” adds the report.

The PropTiger.com report had studied the market trends based on launches, absorption, inventory and prices, across India’s nine major cities.

The key nine cities studied in the report include Ahmedabad, Bengaluru, Chennai, Gurgaon, Hyderabad, Kolkata, Noida, Mumbai and Pune.

Real estate’s grave concern of unsold inventory finally seems to be declining, at least for new projects, with sales in new launches rising by 23 per cent when compared with the sales in existing projects, which grew by three per cent.

Moreover, one of the remarkable changes was a decline in inventory overhang in Q3FY16 by two months to reach 35 months driven by rise in sales.

Unsold inventory
This is the first time inventory overhang has seen a decline in the past 10 quarters. Mumbai, Bengaluru and Noida have the most unsold inventory, accounting for almost 60 per cent of the total unsold inventory across the key nine cities, the report states.

However, unsold inventory in ready-to-move-in apartments category throughout cities stood at merely 5.5 per cent, implying larger confidence towards ready-to-move-in apartments on account of ‘nil’ construction risk. Pune is one of the key cities that has the best possible mix of low inventory overhang and low aging, the report added.