RERA: Housing inventory at 10-Qtr low on back of RERA, Demonetisation

MUMBAI/BENGALURU: In the backdrop of demonetisation and implementation of the Real Estate (Regulation and Development) Act, 2016, residential real estate is finally tuning itself to end-user driven demand than pure investment.

The second quarter of 2017 marked a record low for units launched across India, while sales continued to outdo new units being built in a quarter for the sixth consecutive quarter. This has resulted in the quarter witnessing the country’s residential inventory overhang dipping to a 10-quarter low, showed data from Anarock Property Consultants. Over 20,000 new units were launched across India’s top seven cities during the quarter ended June, while the corresponding number was slightly higher at over 26,000 units in the first quarter of 2017.

“With the traditional cash flows previously seen in a residential project’s lifecycle not working out under the current policy framework, developers have now changed their business models altogether.

As a result of the changing market dynamics and business models, developers have been going slow on new project launches compared to previous years,” said Anuj Puri, chairman — Anarock Property Consultants. This trend is expected to continue as the industry gears up for further consolidation, and more clarity on RERA implementation across states emerges. According to Puri, the market is seeing clear evidence that players are now adapting themselves to an enduser driven demand reality.

“All pre-launches have stopped and now the projects are being launched only after securing approvals. Developers now prefer launching projects in phases, in step with approvals. Apart from RERA, multiple factors have impacted permissions, including dumping ground, naval land, height restrictions and coastal regulatory zone issues,” said Subodh Runwal, director, Runwal Group.

Mumbai and Bengaluru together contributed over 55% of the overall pie in the quarter. Mumbai contributing 32.5% of the units launched this quarter, followed by Bengaluru at 23%, and Pune at 19.5%. Compared to the first quarter of 2017, the units launched in three markets — Mumbai, Bengaluru and Kolkata — were higher in this quarter while all other cities saw their share in units launches reduce

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