Launches of new homes dips 8% in last fiscal

New Delhi: Housing sector witnessed 8 percent decline in new launches to 1,08,200 units in eight top cities during the last fiscal, mainly due to new real estate law and poor sales post demonetisation, according to a report.

In its latest report, property consultant Cushman & Wakefield said that the top 8 cities saw residential launches of about 25,800 units in the first quarter of 2017 calendar year, down 16 per cent from the year-ago period.

These eight cities are -- Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad.

"Launches in the residential sector have declined by about 8 per cent during the period April 2016 to March 2017 compared to the same period in 2015-16," C&W said. The new home launches stood at 1,17,650 units in the previous year.

The consultant said that launches have seen a steady quarter on quarter decline for the last four quarters, "corresponding with the announcement of Real Estate Regulatory Act (RERA) 2016 in March last year and the demonetisation exercise in November 2016."

However, the share of affordable segment in total launches has improved to 30 per cent last fiscal compared to 25 per cent in the same period in 2015-16. The share of high- end and luxury segments fell to 11 per cent from 13 per cent during the same period.

"While sales have been weak across segments, it has been prominent in the high-end and luxury segments over the last quarters owing to demand-supply mismatches," C&W said in a statement.

On prices, the consultant said that rates fell in cities such as Delhi-NCR, Bengaluru and select markets in Mumbai in the first quarter of 2017 on combined impact of a prolonged slowdown in sales and the pressure of mounting inventory.

In Delhi-NCR, quoted capital values softened by 1-3 per cent in both the mid and high-end segments across most of the sub-markets from the previous quarter.

Bengaluru too witnessed rationalisation of prices in most of the sub-markets across mid and high-end segments.

The real estate developers have cut down on new launches and are reducing the effective cost of their offerings by bundling in incentives and add-ons to clear unsold stocks.

To boost sales, developers are offering several lucrative packages and incentives to close deals for genuine buyers.