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During January-March Home sales increase 6% in India’s top eight cities

Posted by BrickAcres on May 4, 2016
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There could be a revival in sight for India’s housing sector, with
home sales data showing marginal growth for the second straight
quarter.

According to a report by property research firm Liases Foras,Home
sales across India’s top eight cities increased 6% in the January-
March quarter from that a year ago, helped by stagnant pricing,
discounts from builders and launch of new projects at lower
prices in some cities.

Sales in the National Capital Region were up 33% and that in
Mumbai 12%, while Bengaluru saw sales drop 18%. Sales in Ahmedabad
went up 32% while that in Chennai were up 25%, Hyderabad saw 20%
growth and Kolkata 14% while Pune saw a 25% decline.

Prices remained flat in Mumbai while NCR saw a correction of 3%
from a year ago, helping developers push their stock.Ahmedabad was
the only city to witness double-digit growth in prices at 12%.

Compared to the previous quarter, 26% more new projects were
launched in cities led by Mumbai and Bengaluru, with most of the
launches being in the Rs 25-50 lakh price bracket.

Sales of apartments under Rs 25 lakh increased 46% in the past one
year while sales in the Rs 25-50 lakh bracket grew 13%, indicating
increasing affordability of homes.

Sales of apartments costing Rs 1-2 crore were down 9% while those
of apartments costing more than Rs 2 crore were down 4% during the
quarter. Unsold stock, however, increased 22% to 1,170.8 million
sq ft from 1,125.2 million sq ft in the previous quarter.

“The gap between prices of apartments and affordability is
reducing, which has helped sales. It is an end-user driven market
today,” said Pankaj Kapoor, managing director of Liases Foras.

For the first time since January March 2014, the total sales
across eight tier 1cities crossed 60,000 units.

Getamber Anand, national president of the Confederation of Real
Estate Developers Associations of India said more people have
started buying homes as prices have remained stagnant over the past
two years across markets.

Falling interest rates are also helping. State Bank of IndiaBSE
-0.79 % on Monday cut its home loan rate for women borrowers to
9.35% and 9.4% for all others. “When interest rates come down
below 9%, there will be a further incentive for people to buy,”
Anand said. “And combined with a good monsoon, Diwali should be
very good this year,” he said.

RBI Governor Raghuram Rajan had urged builders in late April to
cut home prices in order to stimulate housing demand. Builders had,
however, categorically said that there is very little room for any
further price cuts.

Akey reason why homebuyers have shied away from buying homes is
massive delays in the delivery of apartments across the country
that has led to buyer activism against builders.

Builders who have been able to mitigate this and showcase a strong
delivery track record have been able to sell their apartments at
improved prices while others have been struggling.

Niranjan Hiranandani, managing director of Mumbai-based
Hiranandani group, said buying is taking place but much depends on
the rains for this to sustain.

“The economy is definitely growing; money is being spent on
infrastructure. If there are good rains, the impact on home sales
should be even higher,” he said.

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