Country’s top 8 property markets have seen a 16% on-year decline in new residential project launch. A Cushman & Wakefield report shows that there’s a slump of 25,800 units of new launches in the in the first quarter of 2017. Market expects to witness more development after complete RERA implementation. During this transition period people are probably unsure about the unadulterated implementation of the central regime, as most of the states are yet to submit respective RERA rules and the conjecture is the reason behind this inordinate delaying by the states to safeguard most of the ongoing projects.
RERA implementation won’t impact the current market price in the short to medium term. Residential launches have declined just about 8% during the period April 2016 to March 2017 compared to the same period in 2015-16. Report suggests the reduction is the consequence of abrupt demonetization move followed by RERA implementation announcement. Kolkata has always been attractive market for real estate investment for its metrical realty valuation. People are mostly seen investing in flats in Rajarhat for the availability of bulk projects as per their requisite. Still, new project launch gets overshadowed by on-hand inventories in the prime locations of the city.
The only residential sector which has been a constant source of revenue is the affordable housing sector. Thus, with the increasing market demand there has been a hike in affordable project development of 30% compared to 25% in the same period in FY 2015-2016. Whereas, the sale of ultra-luxury residential projects have been dropped by 11% from 13% during the same period. The fall of sale volume is better evident in high-ending luxury housing sector comparing to the other sectors due to demand-supply imbalance.
Luxury housing sale will be static for next couple of quarters as developers are busy in modifying their business structure, operation and marketing strategies complying with RERA norms. Eventually buyers won’t show much interest in realty investment as they want their rights to be protected with a legal bound. Minor cutting back IT/ ITeS segment is likely to impact the end-user sentiment. A gradual sale increment is forecasted during second half of 2017.
“RERA is the biggest reform of real estate industry till date. It aims to bring back much-awaited accountability and transparency in realty practice. Market will be automatically readjusted after the enforcement of RERA and GST. Residential sector will regain positive buyer’s interest with the legitimate practice of realty under RERA ambit,”- said RERA (West Bengal Chapter) expert Mr. Mahesh Somani.
“Not online in Kolkata major markets like Delhi, Bengaluru, and Mumbai are also currently dealing with heaps of inventories, which has led the city’s to have a price correction/ price moderation of on-hand luxury projects in most of the sub markets across the MIG and HIG segment. Again developers are offering lucrative packages to clear inventory back-logs.”- Mr. Somani also added.
Developers are focusing to finish the under construction projects (advanced construction stage) to safeguard them from RERA purview. At present, developers are primarily engaged in establishing systems and processes to register the ongoing projects with respective RA.
–LNN (Liyans News Network)