Housing Absorption Dips 20 per cent q/o/q in Q3 2019: ANAROCK

[vc_row][vc_column][vc_column_text]Anuj Puri,
Chairman,
ANAROCK Property Consultants. [/vc_column_text][vc_column_text]

• Top 7 cities saw 55,080 units sold in Q3 2019 against 68,600 units in Q2 2019; yearly decline recorded at 18 per cent over Q3 2018
• New launches fell from 69,020 units in Q2 2019 to 45,230 units in Q3 2019, 13 per cent y-o-y decline from 52,130 units in Q3 2018
• Kolkata & Chennai see lowest quarterly sales drop of 12 per cent each; Hyderabad records highest drop at 26%
• Unsold inventory in top cities declined meagrely by 1 per cent - from 6.66 lakh units in Q2 2019 to 6.56 lakh units in Q3 2019; Hyderabad sheds maximum unsold stock of 5 per cent in a quarter
• 41 per cent new supply of Q3 2019 in affordable segment, 36% in mid-segment (priced INR 40-80 lakh)
• Property prices largely remained stagnant across cities
• Recent Govt. sops boost sentiment at onset of festive season; housing sales may increase in upcoming quarters

[/vc_column_text][vc_column_text]Among categories, affordable housing continued to dominate - accounting for a 41per cent share of overall new launches (45,230 units) in Q3 2019, followed by 36 per cent in the mid-segment priced between INR 40-80 lakhs. 

Anuj Puri, Chairman - ANAROCK Property Consultants says, “The decline in new supply and housing sales in this quarter was expected as both homebuyers and developers remained cautious and risk-averse. The slew of economy-boosting measures by the government to spur growth across sectors will very likely give the housing sector a leg-up in the festive season and the ensuing quarters.”

“As evidenced by the quick revival of the stock markets, these measures have already bolstered all-round sentiment. Housing is intensely sentiment-driven and we expect the numbers to improve significantly going forward. Most importantly for the sector, we are seeing a gradual revival of investor confidence. The recent corporate tax cut will spur investments from both domestic and foreign investors - the real need of the hour.”     

Overall unsold stock as on Q3 2019 is approx. 6.56 lakh units across the top 7 cities, declining by a meagre 1per cent against the preceding quarter. However, developers were able to shed their overall unsold stock by at least 5per cent during the year which stood at 6.87 lakh units back in Q3 2018.[/vc_column_text][vc_single_image image="33547″ img_size=""][vc_column_text]Housing sales in Q3 2019 saw a quarterly decline of 20 per cent across the top 7 cities - from 68,600 units in Q2 2019 to 55,080 units in Q3 2019. New launches fell by 34 per cent over the same period - from 69,020 units in Q2 2019 to 45,230 units in Q3 2019. On a y-o-y basis, housing sales fell by 18 per cent while new launches fell by 13 per cent in Q3 2019 over the corresponding quarter in 2018. The ongoing 'shraadh' period - seen as inauspicious in many parts of the country - coupled with the ban on the subvention schemes compounded the quarterly dip. Also, above normal and heavy rainfall impacted the number of site visits resulting in longer decision-making cycle.      

In terms of sales, Hyderabad saw the maximum decline of 26 per cent during the quarter with housing absorption falling from 4,430 units in Q2 2019 to 3,280 units in Q3 2019. Chennai and Kolkata saw the least sales decline at 12 per cent each. As on Q3 2019, Chennai recorded overall sales of 2,620 units while Kolkata witnessed sales of 3,120 units.  

MMR saw maximum sales in the quarter at 17,180 units, followed by Bengaluru with 10,500 units. On the supply front, only Kolkata saw quarterly rise in new launches in Q3 2019, increasing by 19 per cent from 2,640 units in Q2 2019 to 3,130 units in Q3 2019. On the contrary, NCR saw maximum quarterly decline of 57 per cent - from 13,570 new units in Q2 2019 to 5,790 units in this quarter.      [/vc_column_text][vc_column_text]Q3 2019 New Launch Overview

The top 7 cities recorded new unit launches of around 45,230 units in Q3 2019 against 69,020 units in Q2 2019 and 52,130 units in Q3 2018.              

The key cities contributing to Q3 2019's new unit launches included MMR (Mumbai Metropolitan Region), Pune, Bengaluru and NCR, which together accounted for 83per cent of the supply additions. MMR saw the launch of approx. 14,040 units - a decline of nearly 39per cent over Q2 2019 and 29per cent y-o-y. Over 64per cent new supply was added in the sub INR 80 lakhs budget segment. 

Bengaluru added approx. 9,370 units in Q3 2019, a quarterly decrease of 15per cent but a 31per cent increase over Q3 2018. Over 83per cent new supply was added in the sub INR 80 lakh
price bracket. Pune added approx. 8,320 units in Q3 2019 against 10,700 units in Q2 2019 - a quarterly drop of 22per cent. The city saw new supply increase by 6per cent annually. NCR added approx. 5,790 units in Q3 2019 against 13,570 units in Q2 2019 - a massive decrease of 57per cent. However, NCR saw the maximum supply rise of 38per cent among the top cities on yearly basis. Approx. 64per cent of the new supply was in the affordable segment in Q3 2019.            

Hyderabad new launches dropped significantly by 51per cent over the previous quarter with approx. 2,050 units launched in Q3 2019. The y-o-y supply decline was also 51per cent.             

Chennai added approx. 2,530 units in Q3 2019 against 3,890 units in Q2 2019, a quarterly decrease of 35per cent and y-o-y fall of 48per cent. Kolkata added approx. 3,130 units in Q3 2019, an increase of 19per cent over Q2 2019's 2,640 units - but a decline of 22per cent y-o-y. Approx. 54per cent of the new supply was in the affordable segment.[/vc_column_text][vc_column_text]Q3 2019 Overall Sales Overview

Around 55,080 units were sold in Q3 2019 - a decline of 20per cent over Q2 2019, and a 18per cent y-o-y decline.  NCR, MMR, Bengaluru and Pune together accounted for 84per cent of the sales in the quarter. Hyderabad recorded a significant drop in sales in this quarter when compared to other top cities. City sales decreased by 26per cent - from 4,430 units in Q2 2019 to 3,280 units in Q3 2019, due to a big drop in new launch supply. Y-o-y, housing sales in city dropped by 32per cent.               

NCR also recorded a notable decrease in sales in Q3 2019. Sales decreased by 22per cent - from 12,640 units in Q2 2019 to approx. 9,830 units in Q3 2019. The city saw sales of 11,360 units in Q3 2018, amounting to a 13per cent annual decline. Both MMR and Bengaluru saw sales decrease by 20per cent each in Q3 2019 over the previous quarter, at approx. 17,200 units and 10,500 units respectively. Interestingly, on a yearly basis, Bengaluru saw the maximum sales decline of 35per cent, while MMR saw the least decline at 6per cent.  

Sales in Chennai and Kolkata in Q3 2019 decreased by 12per cent each over the previous quarter, clocking in at approx. 2,620 units and 3,120 units respectively. On y-o-y basis, Chennai saw sales decline by 11per cent and Kolkata saw a 27per cent fall. In Pune, approx. 8,550 units were sold in Q3 2019- a decline of 18per cent over Q2 2019 and an 8per cent decline y-o-y.[/vc_column_text][vc_column_text]Unsold Inventory - Q3 2019

Overall unsold housing inventory decreased by a meagre 1per cent q-o-q - from 6.66 lakh units in Q2 2019 to 6.56 lakh units by Q3 2019. On a y-o-y basis, the top 7 cities saw unsold stock fall by 5per cent from 6.87 lakh units in Q3 2018.  

Bengaluru witnessed the highest yearly reduction in unsold inventory by 17per cent - from 76,550 units in Q3 2018 to 63,540 units in Q3 2019. Hyderabad was second in shedding overall yearly unsold stock by 12per cent in Q3 2019. It now stands at 23,890 units - the lowest among the top 7 cities.              

Residential property prices across the top cities remained stagnant in Q3 2019 when compared to the previous quarter. However, Pune and Kolkata saw prices decrease by 1per cent over the previous quarter. Yearly trends also indicate no major change except for NCR, MMR, Bengaluru and Hyderabad, which saw a minuscule 1per cent rise.[/vc_column_text][/vc_column][/vc_row]

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