In a bid to galvanize the real estate market central government has already initiated several courses of actions such as- major incentives subsidy on affordable housing sector, revival of Benami Transactions (Prohibition) Amended Act, 2016 to determine the discontinuation of black money circulation in real estate market, enforcement of Real Estate (Regulation and Development) Act, 2016 in order to buyers’ interest right through the entire transaction; finally which translated into a better sales in country’s top-8 cities. Market experts suggest that this is just beginning of the sound growth of Indian realty sales.
Liases Foras Real Estate Rating & Research reports suggest that, by far residential property sale is increased by 6% across 8 major cities of the country on a successive ground in the second quarter taking the total growth to approximately 28 per cent after the money-ban move.
The sequential growth believes inference as the growth was verified after the 21% raise observed in the previous quarter. This is despite the disorder of execution of Real Estate (Regulation & Development) Act, 2016, and Goods & Services tax (GST). On a yearly basis as well, the growth in sales placed at 4% in the quarter.
Knight Frank report indicates that the growth in residential property sale is mainly determined by the affordable housing sector. It’s only the affordable housing sector, the sale of which was not shaken by the demonetization move. While sales were down for the demonetization blow in the top-8 cities of the country by 11% during the H1 ended in June on-year, July-December period have witnessed same proportion of augmented sale volume post demonetization shock.
Mumbai Metropolitan Region (MMR) is the top scorer recorded 24% of the overall sale in the Tier-I cities of India. According to Liases Foras report, a total number of 15,824 units have been sold – which is the third highest sales figure came from this region during the past seven years, after June 2009 with 21,000 units and Sept 2009 with 17,000 units.
Keeping aside the mega-budget property market affordable housing sector priced Rs. 25 lacs alone gave business of 17% of the total sale compared to 16% of the last quarter. Here also MMR topped that chart with maximum sales in the affordable category too at 24%, Pune comes second in the row 22%. LIG properties within cost bracket 50 lac-1 crore have recorded marginal 1% increase.
This is supposed to be the rosy time for the leading mortgage lenders of the country. Loan disbursement for residential property buying has significantly jumped up with the average loan size of 26.3 lac. This indicates the increasing demand for budget housing apartments. Given the interest rate lower for the LIG and MIG group, property price hasn’t been also increased by far. Alongside inventory levels across the Tier I cities is decreased to 44 months in the June quarter from 47 months in the previous quarter, which apparently will ease up the new product launch in the coming days.
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