Housing sales in the third quarter of 2019 saw a quarterly decline of 20 percent across the top seven cities in the country, going down from 68,000 units in the second quarter to 55,080 units in Q3, data from Anarock showed. The drop was 18 percent on a year-on-year basis.
New launches by real estate firms fell 34 percent, going down from 69,020 units in the second quarter this year to 45,230 units in Q3 2019. Delhi National Capital Region (NCR) saw the biggest slide in new launches at 57 percent on a quarterly basis, while Kolkata was the only major city to register a growth in new launches with a quarter-on-quarter increase of 19 percent.
While the real estate market is beset by sluggish growth for quite some time, the poor performance in the quarter has been compounded by “shraadh” period which is considered inauspicious in several parts of the country. The government’s subvention scheme and curtailed visits by prospective homebuyers due to the monsoon season also contributed to the sector’s woes.
Hyderabad was the worst impacted among the major cities, registering a drop of 26 percent in the quarter. Chennai and Kolkata were the least impacted with a decline of 12 percent.
Anuj Puri, the chairman of Anarock Property Consultants, said the decline was on expected lines since the consumers as well as builders continue to remain risk averse.
“The decline in new supply and housing sales in this quarter was expected as both homebuyers and developers remained cautious and risk-averse,” he said.
Finance minister Nirmala Sitharaman has announced a string of measures over the past few months, including a cut in corporate tax rates, and Puri feels that the central government’s initiatives will lift the pall of gloom afflicting the real estate sector in the country.
“The slew of economy-boosting measures by the government to spur growth across sectors will very likely give the housing sector a leg-up in the festive season and the ensuing quarters,” said Puri.
He added: “As evidenced by the quick revival of the stock markets, these measures have already bolstered all-round sentiment. Housing is intensely sentiment-driven and we expect the numbers to improve significantly going forward. Most importantly for the sector, we are seeing a gradual revival of investor confidence. The recent corporate tax cut will spur investments from both domestic and foreign investors — the real need of the hour.”