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Housing Sales Rise in Q2 FY2019 Across Major Indian Cities
By PropertyGeld Editorial Team
Published on PropertyGeld:
Residential Sales Improve Across Major Cities
India's residential property market showed signs of recovery during Q2 FY2019. Housing sales increased significantly across most major cities, while developers remained cautious about launching new projects.
New residential launches fell by 35%, from around 54,170 units in the same quarter of the previous year to approximately 35,836 units. At the same time, sales increased by 24%.
This indicated that developers were focusing more on selling existing inventory rather than continuously adding new supply.
Mumbai, Pune and Chennai Lead Sales Growth
Mumbai, Pune and Chennai recorded the strongest year-on-year improvement in housing sales, with each market registering growth of more than 50%.
The Mumbai market included Mumbai, Navi Mumbai and Thane, while the Pune and Chennai markets were analysed separately.
The strong performance indicated improving buyer confidence in these markets during the quarter.
Affordable Housing Remains Important
Affordable homes continued to account for a significant portion of residential demand.
Properties priced below ₹50 lakh remained particularly important for buyers. The report suggested that developers were likely to respond to this demand by designing smaller residential units and focusing on more affordable configurations.
Pune, Ahmedabad and Kolkata had a relatively high amount of unsold inventory in the below-₹25-lakh segment.
Unsold Inventory Falls
One of the positive developments during the quarter was the reduction in unsold housing stock.
Inventory across the nine major markets declined by 5% compared with the previous quarter and 11% year-on-year.
The overall inventory overhang also improved to approximately 34 months, compared with 38 months in the preceding quarter. Hyderabad had the lowest inventory overhang at around 22 months, while Ahmedabad had the highest at approximately 47 months.
Property Prices Show Mixed Movement
Property prices did not move uniformly across the major markets.
Several cities recorded price increases, while NCR markets saw a decline during the period.
According to the report's weighted average apartment prices:
City/Market | Q2 FY18 | Q2 FY19 | YoY Change |
|---|---|---|---|
Ahmedabad | ₹2,961/sq ft | ₹2,963/sq ft | 0% |
Bengaluru | ₹4,903/sq ft | ₹5,052/sq ft | +3% |
Chennai | ₹5,108/sq ft | ₹5,132/sq ft | 0% |
Gurugram | ₹5,238/sq ft | ₹5,050/sq ft | -4% |
Hyderabad | ₹4,095/sq ft | ₹4,558/sq ft | +11% |
Kolkata | ₹3,801/sq ft | ₹3,865/sq ft | +2% |
Mumbai Metropolitan Region | ₹8,725/sq ft | ₹9,153/sq ft | +5% |
Noida | ₹3,895/sq ft | ₹3,870/sq ft | -1% |
Pune | ₹4,736/sq ft | ₹4,775/sq ft | +1% |
These figures are historical Q2 FY2019 data and should not be treated as today's property prices.
Gurugram and Noida See a Different Trend
Unlike most of the other markets, NCR did not experience the same level of price appreciation.
Gurugram's weighted average apartment price declined by about 4% year-on-year, while Noida recorded a smaller decline of around 1%.
The sales recovery was also uneven. While most markets improved, Gurugram and Ahmedabad were among the exceptions where sales momentum did not show the same growth pattern.
RERA and GST Impact
The real estate sector was still adjusting to major regulatory changes introduced earlier, particularly RERA and GST.
By Q2 FY2019, many of the initial implementation challenges were beginning to settle. This helped create a more stable environment for developers and homebuyers.
The industry was also moving towards greater consolidation, with developers becoming more cautious about launching new projects.
Developers Focus on Existing Projects
The decline in new launches suggested that developers were prioritising inventory reduction.
Instead of aggressively introducing new projects, many developers were concentrating on selling existing homes and improving their project-level financial position.
This approach was particularly relevant in markets that still had substantial unsold inventory.
Outlook for the Residential Market
The market outlook at the time suggested that new launches could remain subdued for several quarters.
Demand was expected to remain concentrated in the affordable and mid-income segments, particularly properties priced below ₹50 lakh.
Markets such as Pune, Bengaluru and Hyderabad were considered better positioned for future price growth because their unsold inventory levels were gradually declining.
Conclusion
The second quarter of FY2019 marked a positive period for India's residential real estate sector.
Housing sales across nine major cities increased 24% year-on-year, reaching 72,472 units, even as new launches declined sharply. Mumbai, Pune and Chennai were the strongest performers, while falling inventory indicated gradual improvement in market conditions.
The article is not specific to one city. It is a multi-city Indian real estate market report covering Mumbai, Pune, Chennai, Bengaluru, Hyderabad, Kolkata, Gurugram, Noida and Ahmedabad.
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