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Good News For Buyers With Home Sales On A Decline

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Good News For Buyers With Home Sales On A Decline
Anagh Pal - 20 October 2019

Kolkata, October 20: Project launches in India’s major property markets continued to fall in the second quarter of the current financial year, according to a report by PropTiger.com.

The cities covered in the analysis are Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.

A comparison of numbers between the first half of FY19 and FY20 also showed that home sales and new launches moved downwards. As compared to the sale of 170,715 units in the first half of FY19, only 151,764 units were sold in the same period in FY20, registering an 11 per cent fall. Similarly, as against the launch of 137,146 fresh units in the first six months of FY19, only 83,662 units were launched in India’s nine markets in the first six months of FY20, a fall of 39 per cent.

Fall in new launches:

New launches are mainly concentrated in Mumbai and Pune. As against 61,679 fresh units launched in July-September FY19, only 33,883 new homes were launched in the second quarter of this year. Of these, 41 per cent units were in the affordable category i.e. units that are priced at Rs.45 lakh or less.

At a count of 10,425, the highest number of units were launched in Pune during the quarter, followed by 8,132 homes in India’s financial capital Mumbai.

New launches declined across cities other than Gurugram, which saw an increase in the number of launches.

Affordable housing sales on the rise: A total of 65,799 units were sold during the quarter ending September this year as against 88,078 units during the corresponding quarter the previous year. When compared to the sales registered in the same quarter last year, the number this year declined across the cities covered in the report. Interestingly, nearly half the units that were sold during the quarter are affordable homes. At 21,985, the highest number of units were sold in the Mumbai market, followed by the sale of 13,644 homes in Pune.

What should buyers do: “Following the repo rate cut by the RBI, several banks, including SBI, have now significantly reduced their lending rates. In some cases, home loans are now available at interest rates as low as 8 per cent. While this significantly reduces the cost of home purchase for buyers, easy availability of affordable homes also provides them an opportunity to have a home this festive season while also enjoying higher tax breaks. Data available with PropTiger.com show there are nearly 4 lakh affordable housing units in India's nine major cities currently. These are units priced at Rs 45 lakh or below, on purchase of which Rs 3.50 lakh tax deduction on interest component is now available. Keeping in mind the festive season, builders are also offering discounts in the form of stamp duty and GST waivers. It makes perfect financial sense for a buyer to invest in property this festive season. However, buyers must be extremely careful in evaluating the track record of a developer before making a purchase decision, especially if the home is under construction because one has to be mindful of execution risk.” says Dhruv Agarwala, group CEO, PropTiger.com, Housing.com and Makaan.com.

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