Indians are investing a lot in real estate. If we consider the years 2016-17, approximately 244,830 residential apartments were sold. The cumulative new launches during the same period across the top seven Indian cities were 233,387 units. These figures, presented by the international real estate consultancy firm JLL India, proves that more and more apartments are being sold in our country. During this period in consideration, except the second half of 2017, the number of units launched was outstripped by overall unit sales by five per cent. The second half of 2017 saw the launch of a number of new units.
What we could derive from the data was that the sales velocity in the last eight quarters saw a stable upward trend. What uplifted the market was the “pent-up end-user demand,” as described by DNA India, which could have been the result of a certain observed stability in residential capital prices. The units launched in the second half of last year are witnessing good off take. Once the Jan-Mar 2018 results are out, we would see the difference in sales figures. Interestingly, the latter half of 2017 also saw many states implementing RERA. This could mean that the fresh supply of units was because of the lag effects of RERA.
According to CEO and Country Head of JLL India, Ramesh Nair, the time is ripe for fence-sitters, investors and end-users to enter the residential market because prices have been stable for a certain period now. The continuous stability in capital values has been the result of demand and supply market dynamics periodically outstripping one another. Residential property buyers must now take advantage of the decade-low lending rates from banks. The rates were reduced significantly in 2015. Hence, home buyers can easily service their EMIs. As the RERA mechanism stabilized across the country, the number of launches went up.
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This also proves that there is increased confidence in the market, which is highly beneficial for the future potential demand. This is also a good indicator of the strengthening of compliance standards, governance and transparency by developers. This controlled real estate eco-system, brought about by RERA, has been beneficial for both buyers and developers.