Housing launches jump in Bengaluru, Mumbai and Delhi-NCR

Implementation of regulatory reforms such as RERA and GST has had a positive impact on the residential market with the top three cities of Bengaluru, Mumbai and Delhi-NCR showing signs of recovery in 2018. While Bengaluru and Mumbai recorded 81 percent and 22 percent annual growth respectively. Delhi NCR led with 71 percent year-on-year growth in sales, says a new report.

There has been a rise in the number of launches across Delhi NCR, Mumbai, and Bengaluru in 2018 compared to 2017. According to JLL Research, Delhi-NCR witnessed 114 percent year-on-year growth in new launches at 17,660 units, which is the highest among the three markets. While Bengaluru recorded annual growth of 81 percent at 37,286 units, Mumbai’s housing market saw a healthy 22 percent rise in launches.

While new launches across these three key metros recorded strong growth, positive consumer sentiment in the post-reforms regime has resulted in higher sales. In percentage terms, Delhi-NCR topped with 71 percent y-o-y growth in sales at 24,725 units. However, the jump in sales was due to low base effect.

While sales in the first half of 2018 continued to be slow in Bengaluru, it picked up significant momentum in the latter part of the year, expanding at 17 percent on an annual basis. Post a consistent drop in sales since 2016, the offtake of residential units in Mumbai revived and grew at 10 percent during 2018.

The rise in launches has, however, added to the number of years that is needed to sell (YTS) the existing unsold inventory in the three cities. As a result of the higher quantum of unsold inventory and sluggish demand of past few years, housing prices have remained steady across the three markets. The stability in the rates is likely to push the sales momentum in 2019, the report says.

New launches in Delhi-NCR more than doubled during 2018, led by heightened activity in Gurugram and Ghaziabad. However, launches continued to be significantly lower than the momentum of around 70,000 units seen in 2014 and 2015. While Noida constituted a majority share in total launches, its share reduced significantly to 39 percent in 2018 from 65 percent in 2017.

As for sales, after a gap of four years, Delhi-NCR recorded robust sales growth of over 70 percent in 2018 compared to the previous year. However, this is still lower than the sales volume of 2014 and 2015, when the region witnessed sales volume of more than 40,000 units. Gurugram, followed by Noida-Greater Noida and Ghaziabad, reigned the robust recovery in the offtake of housing units.Launches in Mumbai’s Navi Mumbai and Western suburbs II (Malad, Kandivali, Borivali, Dahisar) witnessed significant traction in terms of launches. The rapid ongoing infrastructure developments such as metro rail network, coastal road and extension of suburban rail network – Nerul-Seawoods-Uran across the city, suburban and the peripheral areas have propelled the interest of developers.