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Realty picks up: Inventories down 10% in July-September
Financial Express  |  December 7, 2018

FE Bureau

Real estate inventory on a pan-India basis declined 10% year-on-year to 1.3 billion sq ft in the September quarter as developers lowered new launches.


According to Kotak Institutional Equities estimates, launches at 37.2 million sq ft in 2QFY19 were significantly lower than 62.1 million sq ft launched in 1QFY19 and 50.5 million sq ft in the same period last year.


Real estate sales across major cities clocked 31.6 million sq ft in the September quarter, against launches of 13.1 million sq ft.


Prices saw a slight increase the reviewed quarter, averaging around Rs 5,400 per sq ft, against Rs 5,275 per sq ft in 1QFY19.


Sales activity in the National Capital Region of Delhi (NCR) remained upbeat at 4.2 million sq ft (+47% Y-o-Y) in the September quarter. Across all metros, launches remained the lowest in the Delhi NCR, with only 1.6 million sq ft being released in September 2018 in peripheral regions of Noida and Greater Noida, the Kotak report noted.


Accordingly, the net unsold residential inventory in the NCR stood at 234 million sq ft as of September 2018 and was equivalent to 58 months of sales (based on average of trailing 12 months). On a monthly basis, prices increased slightly in the NCR in September 2018 to Rs 4,620 per sq ft (up 3% Y-o-Y).


Launches in the Mumbai Metropolitan Region (MMR) showed a downward trajectory, with 2.2 million sq ft being launched in September 2018 (average monthly launches of 3.7 million sq ft in 1QFY19 and 5.9 million sq ft in September 2017). Launch activity during the month was more predominant in Thane. Sales, however, remained upbeat, with 6 million sq ft (+7% Y-oY) residential area being sold in September 2018, contributed by both Mumbai (2.2 million sq ft) and Thane (2.9 million sq ft).


The average realisation in the MMR region inched downwards to Rs 10,200 per sq ft in September 2018 (Rs 10,450 per sq ft in August 2018), led by more sales in low-realisation Thane region.


Outstanding inventory in the MMR remains the highest across metros at 283 million sq ft as of September 2018 (equivalent to 51 months of sales), declining by 16 million sq ft in year to date FY2019.


Sales for the Bengaluru market stood at 4.7 million sq ft (+15.7% y-o-y) against launches of 3.2 million sq ft in September 2018. Increase in launch activity is attributed to new projects launched by Godrej and Brigade (1.5 million sq ft). Unsold inventory at 159 million sq ft (as of September 2018) continued to be the lowest across regions in India. Realisations in September 2018 declined 2% y-o-y to Rs 4,700 per sq ft.