Real estate suffers huge jolt, homes launches in 2017 plummeted by 78pc

 Real estate market suffered a huge jolt in India as homes launches in 2017 plummeted by staggering 78pc from the peak of 2010. 

According to a report by Knight Frank India all cities witness fall in launches in comparison to previous years, but Hyderabad was worst hit.

Knight Frank report said that volume of new projects entering the market in the second half of 2017 stood at approximately one-fourth of the supply levels in 2015. Launches were below the demonetisation-hit second half (H2) of 2016.

According to Knight Frank India eighth edition of its flagship half-yearly report – India Real Estate at 84 per cent, Hyderabad records steepest fall in launches. Other IT/ITeS dominated markets such as Pune (58 per cent), Bengaluru (37 percent), Chennai (33 percent) also witnessed massive drop in launches.

It said that the sales struggle across markets in which Bengaluru saw downtrend of 34 per cent. Mumbai (19 per cent) and NCR (21 percent) see a spike on a demonetisation base effect. Bengaluru, in particular, recorded negative growth in both launches (-37 percent) and sales (-34 percent) for the first time in H2 2017. Hyderabad also recorded the decadal low in home launches.

The weighted average prices fell by an average of 3 per cent across cities with Pune witnessing the highest decline of 7 per cent year on year (YoY) followed by Mumbai at 5 percent YoY. Markets high on ready to move inventory such as Hyderabad and Ahmedabad saw prices move up 3 percent and 2 percent respectively.

As far as office spaces are concerned, new completions increase by 7 per cent in 2017 but not at par with occupiers’ demand. Supply in H2 2017, 13 per cent up YoY. Transactions maintain a steady momentum. Technology sector headwinds and supply crunch was responsible for subdued growth.

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