Housing sales are estimated to rise by mere 4 per cent to 2.58 lakh units across seven major cities during this calendar year on subdued demand because of liquidity crunch and overall economic slowdown, according to property brokerage firm Anarock.
“Indian real estate was devoid of any appreciable forward momentum in 2019. Dwindling consumption, lacklustre investment appetite and the global slowdown overshadowed all possibilities for growth,” Anarock Property Consultants Chairman Anuj Puri said. India’s GDP growth rate slumped to a six-year low of 4.5 per cent in Q2 FY20.
In its yearly round-up for the real estate sector, Anarock said that collectively, all four quarters of 2019 are likely to see housing sales of 2,58,410 units (assuming 56,200 units in Q4 2019) as against 2,48,300 units sold in entire 2018.
Sales were better in the first half of this year but demand fell in the third quarter. Anarock tracks seven major cities — Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Pune, Hyderabad, Chennai and Kolkata.
“The real estate sector’s performance — a reliable barometer of India’s overall economic health — painfully reflected the macro-economic state of affairs. The liquidity crisis did not relent and dented any ‘real’ growth during the year,” Puri said.
“Multiple developers fell off the grid while others still struggle to stay viable. However, strong players with healthy balance sheets — in many cases diversified beyond real estate — sailed through 2019 and recorded decent housing sales and revenue growth,” he added.
For the housing sector, 2019 was a non-event in terms of sales growth and investor interest.
“Sentiments remained subdued, sustaining almost solely on end-user activity focused on ready-to-move-in or almost-complete homes. Branded developers gained ground, with some listed players performing exceptionally well on sales and commensurate revenue growth,” he said.
For the housing sector, Puri said the only light at the end of the dark financial tunnel was the announcement of the alternative investment fund (AIF) of Rs 25,000 crore to facilitate the completion of stuck affordable and mid-segment homes.
In fact, affordable housing remained upbeat in 2019 thanks to multiple government sops throughout the year.
First-time homebuyers were given further tax deductions (now amounting to Rs 3.5 lakh in a year) on interest amount of home loans below Rs 45 lakh availed within FY 2020-end.
Luxury and ultra-luxury segments remained limited to end-user interest, with no serious investor activity.
Co-living and student housing gained momentum during the year.
In the organised housing brokerage business, Noida-based Investors Clinic, Anarock, News Corp-backed PropTiger, Anil Ambani-led Reliance group-backed Square Yards, Quikr Realty, Gurugram-based 360 Realtors and Wealth Clinic are the leading players.