City’s residential market sales down by 1 pc

Sushant Ranjan
Wednesday, 9 January 2019

According to the report, “Affordable housing continued to dominate launches with 71 per cent of the launches being priced less than Rs 50 lakh and 90 per cent of the launches priced below Rs 75 lakh. The trend of compact homes has caught up in Pune as well. Apartment sizes in new launches in Pune shrank by 26 per cent between 2014 and 2018. In some markets, the shrinkage is as high as 35 per cent.”

Pune: Pune, one of the leading markets in real estate across the country, has shown -1 per cent sales in residential market in the year 2018. Mumbai, however, recorded 3 per cent growth in the same segment.
 
Knight Frank India launched the 10th edition of the flagship half-yearly report, ‘India Real Estate’ on Tuesday. The report presents a comprehensive analysis of the residential and office market performance for the period of July-December 2018.

Presenting the report, Paramvir Singh Paul, Branch Director, Pune, said, “The robust growth story in Pune’s office market continued in 2018. The city witnessed the highest growth in this decade. This was largely on account of a healthy demand from occupiers and the presence of large pre-commitment transactions. The year also marked a record year in terms of area transacted. In the residential segment, growth was seen in the Pradhan Mantri Awas Yojana (PMAY)-led affordable housing segment and in the compact homes segments. Sales grew marginally and GST on under-construction continued to act as a deterrent for buyers.”

According to the report, “Affordable housing continued to dominate launches with 71 per cent of the launches being priced less than Rs 50 lakh and 90 per cent of the launches priced below Rs 75 lakh. The trend of compact homes has caught up in Pune as well. Apartment sizes in new launches in Pune shrank by 26 per cent between 2014 and 2018. In some markets, the shrinkage is as high as 35 per cent.”

“Real estate launched in Pune recorded 157 per cent Year-on-Year (YoY) in 2018 and was recorded at 32,684. Launches in the city grew on a low base of 2017. A major spurt was witnessed in the Pradhan Mantri Awas Yojana (PMAY)-led affordable housing segment and in the compact homes segments,” the report said.

In sales, residential segment grew marginally by 4 per cent YoY in second half 2018. Sales were driven by ready to move in and affordable housing segments. However, annual sales were down marginally in 2018 and recorded -1 per cent. Goods and Service Tax (GST) on under-construction continues to act as a deterrent, pushing buyers towards ready projects.

Mumbai saw the highest YoY growth of 220 percent while Pune recorded 157 per cent increase. A full-fledged RERA in both these cities in Maharashtra, coupled with the reprieve from dumping ground ban in Mumbai, facilitated the growth in prices. Mumbai prices fell by 7 per cent while Hyderabad price vaulted by 7 per cent in YoY in 2018. Pune (-3 per cent), Kolkata (-4 per cent) and Chennai (-3 per cent) recorded a moderate correction in asking prices.

Market scenario

  • In the residential segment, growth was seen in the PMAY-led affordable housing segment and in the compact homes segments.
  • Sales grew marginally and GST on under-construction continued to act as a deterrent for buyers.
     

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