Residential real estate sales at 22.2 mnsq ft this year, new launches decline

Residential real estate clocked sales of 22.2 million square feet across major Indian cities this year as new launches declined to 7.9 mnsq ft, Kotak Institutional Equities said in a report. Launches in July 2018 were significantly lower than the monthly average of 14.5 mnsq ft in the past 12 months. Consequently, inventory across India dropped 10 percent to around 1 bn sq ft from 1.1 bn sq ft in July 2017. Prices saw a slight increase in July 2018 averaging around Rs 6,100 per sq ft (Rs 6,000 per sq ft in the first quarter of the financial year 2019), data in the report suggested. As far as the National Capital region is concerned, sales activity remained upbeat at 4.3 mn sq. ft in July 2018. Across all metros, launches remained the lowest in Delhi NCR with only 1 mnsq ft released in July 2018 in peripheral regions of Ghaziabad and Greater Noida. Net unsold residential inventory in NCR stood at 243 mnsq ft as of July 2018, equivalent to 63 months of sales (based on average of trailing 12 months). On monthly basis, prices remained largely flat in NCR in July 2018 at Rs 4,521 per sq ft (up only 1.4 percent year-on-year). Launches in MMR remained upbeat at 2.9 mnsq ft in July 2018 (average monthly sales of 3.5 mnsq ft in the first quarter of 2019 and 4.4 mnsq ft in July 2017) led by new projects coming up in Mumbai and Thane. Sales too kept up with the momentum seen in the past month with 5.3 mnsq ft residential area being sold during July 2018, contributed from the same regions, the data suggested. Average realization in MMR region inched upwards to Rs 10,300 per sq ft in July 2018  led by more sales in Mumbai region. Outstanding inventory in MMR remains the highest across metros at 290 mnsq ft as of July 2018 (equivalent to 54 months of sales), declining by 7 mnsq ft till the year to date of the financial year 2019.