India gets property buying boost! Hyderabad and Delhi-NCR sees luxury category supply rise 60%
On a yearly basis, housing sales jumped by 12 per cent in Q2 2019 over Q2 2018, while new launches increased by 36 per cent during the same period.
Real Estate alert: Housing sales are soaring! Housing sales in Q2FY19 on YoY have risen to the tune of 12 per cent and real estate developers have started to bring new launches into the Indian realty market fuelling the yearly launch YoY to 36 per cent. The outcome in the Indian real estate residential market is unique because housing sales and new launches usually reduce before and during the general elections period. In the same period, led by Hyderabad and Delhi-NCR market, the luxury category saw the supply rise of around 60 per cent.
Speaking on the development Anuj Puri, Chairman, ANAROCK Property Consultants says, “Housing sales and new launches usually reduce before and during the general elections period. However, on a yearly basis, housing sales jumped up by 12 per cent in Q2 2019 over Q2 2018, while new launches increased by 36 per cent during the same period. Going forward, with a stable government in power, residential activity is likely to pick momentum in the coming quarters. Though new launches saw a 2 per cent quarterly decline in Q2 2019, and affordable housing supply fell by 20 per cent against the previous quarter, the luxury category (priced Rs 2 Cr to Rs 5 Cr) saw supply increase by a whopping 60 per cent, led by Hyderabad and NCR.”
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The government’s Budget ‘bonanza’ for affordable housing – an additional Rs 1.5 lakh income tax deduction on interest paid on home loans availed till March 2020 - will incentivise builders to increase their supply in this category so as to attract first-time home buyers. Thus, we may see an increase in supply in this category in the coming quarters.
Paradoxically, however, the prevailing high property prices within the municipal limits of the major cities prevent builders from launching affordable housing projects there, while lack of basic infrastructure facilities in the peripheral areas – where housing within Rs 45 lakh could be developed – discourage buyers.