With Hyderabad being on top among the seven cities, residential real estate market witnessed an increase of 22 per cent in sales at a pan-India level during the period, it said.
Interestingly, the share of affordable and mid-income housing (ticket size of up to Rs 1 crore in Mumbai and Rs 75 lakh across other cities), has seen a hike of up to 58 per cent at the country level, the report added. Pune tops the list, with 91 per cent of the new supply falling in the affordable and mid-income category.
The report added, with gradual revival in homebuyers’ confidence and improved affordability, markets witnessed a resurgence in sales in 2018. The resurgence continued in H1 2019.
During H1 2019, Hyderabad recorded the highest growth in sales at per cent, followed by Delhi NCR (42 per cent) on a year-over-year (YoY) basis. In Chennai, sales grew by 24 per cent over H2 2018, however it is yet to match the levels of H1 2018.
Sales are likely to receive a further fillip with progressive policies of the government, JLL said. During the first quarter this year, the Government further lowered goods and services tax (GST) rates on affordable homes to one per cent from the earlier eight per cent, without input tax credit (ITC). The GST on projects under construction, which are not under the affordable housing segment, was reduced to five per cent from 12 per cent. The rate revision augurs well for homebuyers as the process of claiming the ITC under the former system was complex.
“Series of reforms and rising buyers’ interest in the segment have propelled the sector to align itself to the market demand. Interestingly, in most cities, homebuyers continue to focus on ready to move in projects and projects nearing completion. As a result of this shift in buying preference, developers too are focused on completing their ongoing projects,” said Ramesh Nair, Chief Executive Officer (CEO) & Country Head, JLL India.
With developers focusing on delivery of already launched projects, new launches of residential units decreased by 11per cent on a YoY basis across the top seven cities, the report added. With the exception of Mumbai and Bengaluru, where launches grew YoY, all other cities saw a dip during H1 2019. Mumbai, Delhi NCR and Bengaluru continued to dominate launches and formed three-fourth of the overall launches during this period.
“Limited number of launches by developers, in a way, is helping the sector to balance the demand supply scenario in the country. This will act as a cushion and help the sector revive. As a result of the reform measures more specifically RERA and GST, we expect more transparency in the sector which in turn will bring back buyers’ confidence. ” said Siva Krishnan, Managing Director (MD) - Residential Services, Developer Solutions and Strategic Consulting.
The report added that a substantial decline in launches combined with a strong growth in sales in H1 2019 has brought a parity between year-to-sell (YTS) and average construction period across cities. “With Delhi NCR and Kolkata being the exception, the average YTS at 3.4 years across the seven cities compares favourably with the average construction period for a typical residential project across these cities at 3-4 years,” said Samantak Das, Chief Economist and Head of Research & REIS, JLL India.