Home launches in 9 cities across India dropped by 53% to 22,115 units in the July to September quarter, against 47,032 units launched in the same quarter of the previous year. Developers are blaming on RERA and GST implementation for market slowdown and limited project launches. Delay of states of much-need Real Estate Act notification is negatively impacting the market phenomenon. In order to safeguard most of the on-going projects from RERA ambit, states are rather jeopardizing the overall market recovery of the real estate sector which is of course the biggest need of the moment.
A report says, new home sales also went down by 18% in this September quarter to 44755 units, from 54,721 units in the same period last year. But, market experts consider this slowdown as a positive step ahead towards long-term benefit gain. Yet, the slowdown percentage is bothersome from the sales perspective at present. Inventory volume swelled to 42 months of unsold stocks due to slow sales. There is so much unsold inventory at present but the government is only after promoting the affordable housing sector.
“With effective enforcement of RERA, the expected growth of property market in India will be around 30-40% on year on year basis in the sales and new launches in the last quarter,”-said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).
Considering the current market sluggishness as a temporary move Somani added, “Unified Tax system and RERA implementation will push the sale volume along with complete transparency in the real estate transactions which will make real estate business a buyer-friendly investment zone.”
Contribution of affordable housing crossed 50% mark in the September quarter. Home price below 50 lacs had a steady share of more than 50% in new launches as well as in sales. With increasing buyers’ interest towards ready-to-move apartments, ready-for-possession apartments witnessed a 21% jump.
Another report from a leading property portal in Kolkata highlights that government has gone out of its limits to promote the affordable housing sector. Still, domestic private players are hardly paying any heed as it could only return a marginal profit to them. As per our sources, over 1.5 crore affordable houses are yet to be built within remaining timeframe which is kind of impossible without private collaboration.
It’s been a long time since the real estate industry is waiting for its recovery and continuously losing its shape. Every year there are market speculations about recovery neither the developers nor the buyers get to see any improvement. As we all know that real estate industry is better responsive to market and policy changes, so, it can be said that on the back of new law suit market is on the way to have broad base recovery zone. Only large and organized players can continue their business as per RERA guidelines, mid-scale builders will have to opt for joint ventures to get a go ahead.
- Somani Realtors News Network