18% Homebuyers Prefer New Launch Homes Against Previous 5%: ANAROCK Consumer Sentiment Survey
RERA implementation & lower GST revive consumer faith in new launches; 36% of buyers still prefer ready-to-move-in units
Lower prices influenced >50% homebuyers to purchase homes in 2018; nearly 52% would buy again with the same developer
End-user-driven Bangalore saw 44% of respondents buy homes for investment
70% of prospective buyers prefer properties under INR 80 lakh
Tier 2 & 3 cities new investment hotspots; Bangalore favourite investment destination for NRIs
Mumbai, 24 April 2019: While ready-to-move-in homes remained the preferred choice for several homebuyers, new launches (which drew the least consumer interest in the previous survey) saw a decent revival according to ANAROCK’s Consumer Sentiment Survey H1 2019.
Over 18% of respondents now prefer new launch properties as against mere 5% in the previous survey.
Interestingly, 44% NRIs would now consider new launch properties over under-construction (to be completed in 1 year) or ready-to-move-in homes (obviously a welcome development for developers facing funding issues due to previously negligible advance sales).
Mandeep Lamba, President – South Asia, HVS ANAROCK
The best matches may be made in heaven, but the most memorable weddings happen in picturesque locales back on terra firma. Destination weddings are redefining India’s wedding culture (already famous for opulence, customs and traditions spread over several days).
While the trend of destination weddings is not exactly an Indian concept, its percolation into the globe-trotting Indian millennial milieu was inevitable. Wedding halls are passé – perfect, fairy-tale settings for one of life’s most momentous events are increasingly ‘in’.
It has been reported that the Indian destination wedding industry is expected to reach a market size of INR 45,000 Cr by 2020, with a projected annual growth rate of 25-30%.
Factors such as the rise of the middle class, a booming economy and celebrity endorsements – amply stirred by social media-induced aspiration – have contributed to this growth.
Destination weddings have also given a major shot in the arm to wedding planners, banquet organisers and wedding apparel designers – who, in any case, had little to complain about in a country where all stops are pulled out for weddings.
If the prolonged slowdown in the residential was not bad enough, to begin with,major policy overhauls over the last five years – DeMo, RERA, GST, amendments in the Benami Transactions Act etc. – literally paralysed the residential segment.
While any policy change brings with it some amount of teething pains, the residential segment took a prolonged hit because it had attracted the bulk of black money in the sector. Commercial real estate was far less affected, if at all.
Residential was also far less organized than the commercial office segment. Largely driven by IT/ITeS and BFSI sectors, the commercial real estate segment has been quite transparent and predictable – the primary criteria for foreign investors’ confidence.
Approx. 8,574 keys to hit the market in 2019; nearly 19% increase over the last 2 years
Revenue per available room (RevPAR) sees 17% growth between 2016 and 2018
Average daily rates saw a 6.25% rise in 2018, faster than 4.5% long-term inflation rate
Goa saw the largest signing of keys in 2018 at nearly 2,209 keys, eclipsing Bengaluru by just 192 keys
Hotel transaction volume hit an all-time low in 2018 at INR 5,354 mn since 2007; 2019 likely to witness the sale of high-value hotel assets valued USD 800 mn across key markets
Mumbai, 10 April 2019: With demand finally outpacing supply, the Indian hospitality industry is on an upswing. The ‘India Hospitality Industry Review 2018’ report by HVS ANAROCK predicts RevPAR to grow by 9.5% in 2019.
Interestingly, Q1 2019 itself saw unexpected growth in the India hotel industry. The successful transaction of the Leela Hotels & Keys portfolio in Q1 2019 set a healthy tone for the start to the year, and trends indicating that 2019 could see transaction volumes reach around USD 800 mn.
₹4,51,750 Cr worth housing currently stuck in various stages of non-completion across top 7 cities
MMR and NCR together hold 72% share of delayed projects worth INR 3,49,010, Cr; South cities collectively hold a mere 10% overall share
Chennai has the least stuck stock with 8,650 units worth INR 5,620 Cr
Bengaluru far better off than Pune with less than half of the delayed stock of 86,700 units
If there is one ‘inheritance’ that the Government in power post the upcoming elections will not look forward to, it is tackling the issue of the massive burden of stuck housing across the top Indian cities.
Despite the setting up of a regulatory mechanism, countless homebuyers have been left in the lurch by their builders. Sadly, most of these stuck projects do not fall within the RERA ambit as they were launched years before it was implemented.
Also, with many states having diluted the Centre’s original RERA rules, homebuyers have only the courts to approach – a notoriously tedious task in India.
New supply across top 7 cities up by 27% q-o-q – from 55,600 units in Q4 2018 to 70,490 units this quarter; defies conventional election period trends
Pune and MMR see max. quarterly rise in both housing sales and new supply; absorption in Pune rose by 24%, in MMR by 19%
Bengaluru frontrunner in shedding unsold stock; sees 9% decline in Q1 2019 over previous quarter & a 27% yearly fall
New affordable housing supply sees over 47% q-o-q jump – from 20,800 units in Q4 2018 to 30,750 units this quarter
Annual housing sales rise 58%, new launches up by 91% across the top 7 cities
Defying previous election year trends when sales and new launches remained muted during this period, Q1 2019 saw both housing sales and new supply rise due to multiple Government sops in the first three months of 2019.
ANAROCK Property Consultants’ data shows that housing sales rose by 12% and new residential supply by 27% q-o-q due to sops in the interim budget, GST rate cuts and lowering of home loan rates post RBI’s recent repo rate cut.
As hoped for, the RBI has reduced the repo rate by another 25 basis points.
Back-to-back repo rate cuts by the RBI are indeed the perfect start to a new financial year, resulting in overall reduction of 50 basis points since February 2019.
The repo rate now stands at 6% – returning to the same level as in April 2018. This will augur well for the Indian real estate sector and keep the momentum going in the coming year.
As it is, the sector already saw an uplift in homebuyer sentiment due to the multiple sops offered by both the Government and the RBI in just the first three months of 2019.
These measures have contributed to a 12% increase in housing sales in Q1 2019 across the top 7 cities.
The RBI has done its part by slashing the repo rates. The onus is now on the banks to concurrently reduce home loan rates further, thereby encouraging more fence-sitters to take purchase decisions and giving another boost to the real estate sector.
Self-redevelopment of old, dilapidated housing projects in cities like Mumbai is a much-talked-about new phenomenon and is rapidly catching on because it is, in many cases, a practically possible proposition. Self-completion of stalled projects is, however, another ballgame altogether.
The issue of stalled or delayed project is one of the major pain points of the Indian real estate sector currently. With buyers feeling the heat of delays, it is not surprising that some are now considering completing the projects themselves.
This falls within the realm of possibility if the project in question has sufficient cash flows but is delayed for other reasons.
Rather than being victims, some buyers prefer to take matters into their own hands and are forming groups, hiring contractors and even consulting with Government authorities about the process of completing their projects themselves.
The Challenges of Self-Completion
Realistically speaking, it is a mammoth task to build a real estate project, and only experts within this domain will know the inherent challenges. Projects stuck due to land ownership titles flaws or litigations may not be doable self-completion propositions for buyers at all.
Gudi Padwa is a traditionally auspicious time to invest in real estate in India. While Gudi Padwa is a Maharashtrian concept, the period of oncoming spring and the sense of renewal it brings is acknowledged across the country.
Punjab has its Baisakhi, Andhra Pradesh has its Yugadi, Tamil Nadu celebrates Puthandu and Kerala knows it as Vishu.
Historically, Indians have always seen certain dates as highly auspicious for property purchase and other wealth-creation measures.
For this reason, property sales tend to spike up during festivals like Gudi Padwa and builders align various offers, schemes and discounts with them to encourage this brief phenomenon.
In recent years, this trend came in on a more subdued note because of the prevailing conditions on the real estate market.
In fact, Gudi Padwa in 2018 was anything but a vibrant time for the property sector. It was defined by significantly lower housing sales than developers would have wished for.
However, 2019’s Gudi Padwa is very different.
The slew of sops offered by the Government in just the first three months of the year –
The advent of ecommerce in India ‘smartly’ altered the shopping habits of Indian netizens. Anything and everything – from groceries to apparel to electronics etc. – is now just a click away.
For a while, it appeared that ‘couch potato shopping’ was gaining prominence and disrupting the entire brick-and-mortar business. It now emerges that this has not really happened.
Despite causing disruptions, the ‘ecommerce effect’ was not enough to have a significant and lasting impact on the conventional retail formats.
For a while, online giants like Amazon and Walmart-owned Flipkart were basking in the rising success of the effervescent Indian ecommerce business arena. They were manoeuvring strategies to penetrate deeper into newer markets by way of discounts for their customers.
And then, the Government pulled out a wild card – and thereby threw a major spanner in the works – with the new ecommerce policy.
It came as a shock for the affected entities, including consumers who were buried deep in the world of cash-backs and deep discounts. However, thanks to the new policy, traditional retailers now had a more level playing field and could regain a significant share of their brick-and-mortar stores.