Housing sales fell 30%; new launches decline 44% in Q3FY20: PropTiger report

by Shrutee K/DNS

New Delhi: New project launches in India’s nine key residential markets continued to show a decline, falling 44 per cent year-on-year in the period between October and December 2019, primarily on liquidity concerns, shows the report by PropTiger.com, part of Elara Technologies, that also owns Housing.com and Makaan.com.

According to “Real insight Q3FY20”, a quarterly analysis of India’s nine key property markets by PropTiger DataLabs, the ongoing industry concerns related to the NBFC sector, on which real estate developers largely depend on for their financial needs, has made borrowing difficult for builders at a time when a demand slowdown has hit housing sales. This double whammy has resulted in developers continuing to show a cautious stance towards new project launches. 

“The various measures launched by the government in the recent past to revive growth in the real estate market seem to have made little impact. Considering real estate is a major contributor to overall GDP, which hit a glacial 4.5 per cent rate of growth in the July-September period, we expect further assistance from the government, which would nudge buyers to invest in real estate. In the Union Budget scheduled to be released on 1^st February, we expect the Hon’ble Finance Minister to announce measures that would result in higher savings for individual taxpayers, some of which would hopefully make its way towards property purchases,” said Dhruv Agarwala, Group CEO, Elara Technologies, the country’s only full stack real estate technology platform that owns Housing.com, Makaan.com and Proptiger.com. 

Sales fell across cities

Housing sales in India’s nine key property markets fell 30 per cent annually during the October-December quarter despite the government launching several measures in the recent past to revive buyer sentiment. As against 91,464 units sold during the quarter last year, only 64,034 homes were sold across the nine markets in Q3 this year. Mumbai contributed nearly 40 per cent to overall sales numbers. 

What points towards a nation-wide phenomenon, sales declined across all these markets, with Bengaluru, popularly known as India’s Silicon Valley, registering a 50 per cent fall in sales numbers.  

When compared to the first nine months of the previous financial year, sales fell by 13 per cent during the same period in the current fiscal. As against 263,294 units last year, only 228,220 housing units were sold this year.

Units Sold						Growth
City
	Q3FY19	Q4FY19	Q1FY20	Q2FY20	Q3FY20	YoY (%) Q3vsQ3	QoQ (%) Q2vsQ3
Ahmedabad	5,960	6,414	6,479	5,578	5,118	-14%	-8%
Bangalore	10,299	10,092	9,600	8,425	5,155	-50%	-39%
Chennai	4,467	4,605	4,571	3,772	3,015	-33%	-20%
Gurgaon	4,069	6,970	5,880	3,581	3,834	-6%	7%
Hyderabad	7,869	8,857	7,723	7,002	4,372	-44%	-38%
Kolkata	3,810	4,341	4,333	3,052	2,566	-33%	-16%
Mumbai	30,850	27,527	28,726	24,882	25,198	-18%	1%
Noida	4,556	4,148	3,627	3,038	2,830	-38%	-7%
Pune	19,584	17,911	18,034	15,883	11,946	-39%	-25%
Grand Total	91,464	90,865	88,973	75,213	64,034	-30%	-15%

Sold Units
City
	Apr-Dec 18	Apr-Dec 19	YoY (%)
Ahmedabad	17,436	17,175	-1%
Bangalore	31,932	23,180	-27%
Chennai	14,011	11,358	-19%
Gurgaon	11,794	13,295	13%
Hyderabad	21,505	19,097	-11%
Kolkata	10,754	9,951	-7%
Mumbai	85,811	78,806	-8%
Noida	19,141	9,495	-50%
Pune	50,910	45,863	-10%
Grand Total	263,294	228,220	-13%

Inventory declined 12%

As buyers showed greater faith towards ready homes, inventory levels, declined 12 per cent during the quarter. From 8.83 lakh unsold housing units at the end of the same period last year, unsold stock fell to 7.75 lakh in Q3 FY20. Mumbai and Pune together contribute 57 per cent of this unsold stock.  Also, half of the units in this stock are affordable homes (units priced below Rs 45 lakh). 

At the current sales velocity, builders would take 29 months to sell off the existing stock.

Unsold Inventory						YoY (%) – Q3vsQ3	QoQ (%) Q2vsQ3
City	Dec/2018	Mar/2019	Jun/2019	Sep/2019	Dec/2019	Dec 19 Vs Dec 18	Dec 19 Vs Sep 19
Ahmedabad	60,015	57,220	52,294	50,690	48,367	-19%	-5%
Bangalore	86,335	83,447	80,520	79,046	79,496	-8%	1%
Chennai	36,642	37,344	35,384	33,304	33,694	-8%	1%
Gurgaon	46,364	44,469	44,522	44,199	42,071	-9%	-5%
Hyderabad	42,140	41,509	38,349	35,216	33,227	-21%	-6%
Kolkata	46,364	44,861	42,040	40,029	37,979	-18%	-5%
Mumbai	338,894	328,052	317,253	305,018	296,465	-13%	-3%
Noida	67,991	65,577	63,847	61,545	59,261	-13%	-4%
Pune	158,738	155,679	151,842	148,676	144,300	-9%	-3%
Grand Total	883,483	858,158	826,051	797,723	774,860	-12%	-3%

Over 5 lakh new units to be delivered in CY2020

A total of 5.33 lakh units were delivered across the nine markets in calendar year 2019, and another 5.45 lakh units are expected to be delivered through the course of calendar year 2020.

Launches fall most in Kolkata, Gurugram

Only 41,133 units were launched in Q3 FY20 as against 73,226 units in the corresponding period last fiscal, the report shows. New launches fell across markets, with Kolkata and Gurugram seeing the biggest fall, at 79 and 74 per cent, respectively. Nearly 40 per cent of new launches were concentrated in India’s financial capital Mumbai, data show.

Affordable housing continued to dominate launches, with 52 per cent units launched in this segment.

When compared to the first nine months (April-December) of the previous financial year, launches declined by 32 per cent during the same period in the current fiscal. While 215,596 units were launched between April and December in the previous year, 145,852 units were launched during the same period this year.

Prices increase marginally across cities; Hyderabad sees 13% appreciation

Average values of property increased by 13% year-over-year in Hyderabad, the highest increase among all the cities included in the report, while Gurugram and Ahmedabad registered 6% and 5% increase, respectively.  In other cities, prices showed only nominal increases, between one and three per cent.  

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

About Elara Technologies Pte. Ltd.: Singapore-based technology services company Elara Technologies Pte. Ltd., co-founded by Dhruv Agarwala, Group CEO, is the country’s only full stack real estate technology platform that owns Housing.com, Makaan.com and PropTiger.com.

Housing.com: Founded in 2012, Housing.com is India’s most innovative real estate advertising platform for developers, real estate brokers, home owners and tenants. The company offers the largest selection of verified listings in India through a trained team of data collectors, analysts and auditors. The one-of-a-kind Data Sciences Lab at Housing.com analyses a significant body of data to allow buyers and sellers to make intelligent decisions.

PropTiger.com: PropTiger.com is India’s leading digital real estate advisory firm offering a one-stop platform for buying residential real estate. Founded in 2011 with the goal to help people buy their dream homes, PropTiger.com leverages the power of information and the organisation’s deep-rooted understanding of the real estate sector to bring simplicity, transparency and trust in the home buying process. PropTiger.com helps home-buyers through the entire home-buying process through a mix of technology-enabled tools as well as on-ground support. The company offers researched information about various localities and properties and provides guidance on matters pertaining to legal paperwork and loan assistance to successfully fulfil a transaction. Since inception, the PropTiger.com team has facilitated the sales of close to 25,000 homes worth nearly US$2.2 billion. 

Makaan.com: The platform was acquired by Elara in May 2015, with a vision to establish a true "marketplace" in real estate. With consumer ratings on more than 30,000 sellers, credible listings data and real-time intelligence on property search, makaan.com has quickly emerged as the preferred partner for consumers looking to rent, buy or sell a home. With its unique post-paid advertising fees model and value proposition of no upfront fees for sellers, makaan.com has grown to have more than 45,000 active sellers with over 15000 active brokers in a short span of time. makaan.com offers its online consumers the maximum property options and has become one of the largest advertising platforms in online real estate in India with 1 million residential properties listed across the country.Makaan.com was recently selected as a runner up in the Most Innovative Platform category at a global event in the ICMA event held at Vienna, Austria.

FastFox.com : FastFox.com is an online-to-offline (O2O) brokerage firm that works in partnership with other brokers and landlords to list residential properties online for rental purposes. FastFox.com has pioneered the revolutionary ‘Open House’ model for rentals in India, in which a house is open for viewing by home seekers for a scheduled period of time.