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Real Estate Launches Decline But Sales Go Up

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Real Estate Launches Decline But Sales Go Up

As real estate launches declined across major cities, total sales increased by 7 percent

Real estate sales across major cities in India has increased. According to a report, there is an increase of seven percent year-on-year. However, launches across India declined by 43 percent year-on-year in March. The uncertainty over GST rates and the liquidity crisis have to be blamed for this decline in launches. The launches declined in FY19 by 6 percent year-on-year (YoY) to 286 sq. ft. according to a report by Kotak Institutional Equities.

All the metro cities witnessed a decline in launches of which Bengaluru was the most affected. The tech hub witnessed a YoY dip of 64 percent in March. While launches declined across the cities, Bengaluru was the worst hit. With sales going up and launches declining, the inventory all over the country declined 11 percent YoY to around 1.23 billion sq. ft. The prices across India have increased by 6 percent YoY. The current rates stand at Rs 5,260 per sq. ft. in March.

As far as the National Capital Region is concerned, the sales remained steady in March. Greater Noida accounted for the maximum sales with 1.7 million sq. ft. followed by Gurugram that reported sales of 1.3 million sq. ft. Launches also remained steady in NCR as compared to other metros. The report stated that launches in NCR stood at 3.7 million sq. ft. in March against a monthly average of 2.5m sq ft in FY19.

The net unsold inventory in NCR stood at 221 million sq. ft. as of March. This is equivalent to 50 months’ sales based on the trailing 12 months’ average. However, launches in Mumbai Metropolitan Region (MMR) declined to 2 million sq. ft. this means that a 49 percent decline in March. The launches in Thane, as well as Mumbai, declined. But sales have remained upbeat at 6.7m sq. ft. (up 17 percent YoY) in March. MMR saw the maximum decline in inventory among all the regions. However, outstanding inventory still remains the highest at 272 million sq. ft. as of March. The report suggested that the unsold inventory is expected to be absorbed in 40 months on the basis of the prevailing past 12-month sales.

Source: Moneycontrol

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