Residential Real Estate Sales Improved post Demonetization
Real Estate Sales residential, led by Affordable Housing is showing improvement in pace and has come out of the shadows of demonetization woes. But, it is yet to reach pre-demonetization levels. During 2017’s first half the sales across top eight cities is down by 11%, it has risen the same proportion when compared with July-December period that was marked by the demonetization shock.
On account of the government’s thrust on Housing for All, Affordable Housing has been outpacing other segments, discount on ready inventory and improved sentiments among buyers courtesy RERA has driven sales volumes on sequential basis.
First half of 2017 has witnessed the revival of Affordable Housing across India with 71% of the launches under the Rs 50 Lakh price segment. National Capital Region, Kolkata, Pune and Ahmedabad the property markets have driven the restoration of Affordable Housing projects with around 80% of launches in these cities.
After the demonetization announcement, the buyers showed signs of extreme caution, while Real Estate Developers also did not launch any new projects during this period. The market right now cannot reach the levels seen almost three years ago, the improvement in sales is tough.
Residential Real Estate launches and sales continued to be down annually. Residential launches have declined by 40% to its seven-year low. It was due to the demonetization in January and February, while in May and June it was hit by RERA compliance. Sales is also down by 11% from a year ago and is lowest first half sales in past five years.
According to CMD, Knight Frank India, the path breaking reforms against black economy, such as Demonetization, the RERA 2016, the Benami Transactions Amendment Act 2016 and the recently rolled out GST have pushed the sluggish residential market to the brink. However, he believes that these were corrective measures to transform Real Estate into a transparent industry, and these side effects would eventually fade away and help the industry thrive.