New home sales in the country’s top eight property markets increased 5% on year in the quarter ended September, powered by a 24% surge in affordable housing uptake in a boost to the government’s ‘Housing for All by 2022’ scheme, latest data shows.
Home sales in key markets including Mumbai, National Capital Region, Bangalore, Pune, Chennai and Hyderabad totalled 64,781 units during the quarter, data from Liases Foras Real Estate Rating & Research shows.
This is marginally lower than 64,881 units sold in the previous quarter.
“We have seen a healthy growth in residential sales during September quarter, led by affordable housing,” said Keki Mistry, CEO at HDFC, the country’s largest mortgage lender. “It has a lot to do with the government’s focus on this segment and the fact that it has become more affordable by virtue of growth in income levels and no rise in property price. This growth should continue hereon,” he said.
This is the second straight quarter when home sales increased, coming after 5% decline in January-March quarter and 15% drop in October-December, marked by the government’s demonetisation move.
Mumbai Metropolitan Region topped the list in September quarter with 19% increase in sales year on year.
Property markets in National Capital Region, Hyderabad and Pune followed the financial capital with 15%, 13% and 10% growth, respectively. However, Chennai and Bangalore witnessed a steep decline of 23% and 21%, respectively.
Sales in affordable segment with prices less than Rs 25 lakh increased by 11% on a sequential basis to 12,136 units.
Sales in the cost bracket of Rs 50 lakh to Rs 1 crore increased 7% from a year ago and Rs 1 crore to Rs 2 crore increased 9%. Sales in ultra-luxury segment with prices above Rs 2 crore, however, declined by 6%, the data showed.
“Sales in affordable housing segment is going up as we are seeing more supply from developers who have realized that this is where the demand is as well as financial and fiscal benefits through infrastructure status to affordable housing project and benefit from PMAY (Pradhan Mantri Awas Yojana, the Housing for All by 2022 scheme) subsidy,” said Anuj Puri, chairman at Anarock Property Consultants.
Puri expects the affordable housing segment to continue driving the sales momentum in key markets.
According to realty developers, the sentiment has started to improve with recently implemented Real Estate (Regulation & Development) Act, 2016 and setting up state-wise authorities under the same.
“Homebuyers’ concern over delays in delivery has been waning with RERA being in place,” said Subodh Runwal, director at Mumbai-based real estate developer Runwal Group. “The confidence is showing in their action as enquiries and sales have started to improve since last three-four months,” he said.
Runwal Group sold 400 units at their Mulund and Kanjurmarg during the September quarter.
The top eight cities cumulatively sold highest number of apartments in cost range of Rs 25-50 lakh, with 36% of total sales, followed by cost range of Rs 50 lakh to Rs 1 crore at 29% of total sales. The contribution of affordable segment to the overall sales in these eight cities stood at 19% with MMR contributing the highest with 28%, followed by Ahmedabad with 24% of total sales.
During the quarter, the weighted average price level in these eight markets increased 2% from a year ago. Prices in Ahmedabad and Bengaluru rose the highest by 2%, while Kolkata and Pune witnessed a decline in price by 2%. Prices in Mumbai and Chennai remained stagnant.