New Housing Project Launches Drop In H1 2017 In Hyderabad

Danny Woods
July 7, 2017

The "India Real Estate - Residential and Office" report for January-June 2017 tracked the realty sector's performance in NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Pune and Ahmedabad.

The primary reason cited for the decline was the need for RERA compliance, which has put a break on a large section of new projects, the report added.

Welcoming the rules approved by the Karnataka government for RERA, property developers said the new act would usher in transparency and build trust between developers and customers.

Samantak Das, chief economist, said,"Launches of the real estate projects are affected more than sales". According to a survey conducted by the organisation, two primary reasons for lowest number of launches were noticed, huge stock of unsold under-construction inventory and RERA.

All housing projects including those developed by private builders as well as the Karnataka Housing Board and Bangalore Development Authority will come under the purview of real estate regulatory authority (RERA).

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City-based real estate developers expect a rise in property prices as a result of consolidation of realtors under the Real Estate (Regulation and Development) Act, 2016. Currently, developers are in the process of gauging the exact impact of GST on the industry which has come after a blow of demonetization. NCR and Ahmedabad were worst hit with launches plummeting by 73 percent and 79 percent, respectively.

Lack of clarity on the implementation of Real Estate (Regulation and Development) Act (RERA) 2016, has emerged as a major factor dampening new launches in the city. Government thrust towards affordable housing, widespread discounts on ready inventory and improved sentiments among buyers courtesy RERA drive sales volumes. The new unit launches were lower by 36% at 15,763 units.

NCR continues to be the worst market with 1,80,370 unsold homes with an inventory of 17.8 quarters.

The report further states that the existing unsold inventory of 138652 unsold units remains a concern. "There seems no end to it", said Knight Frank India executive director Ghulam Zia. Described by many as the battery of reforms against the black economy in an unorganised sector, courageous policy decisions such as demonetization, the Rera, 2016, the Benami Transactions (Prohibition) Amendment Act, 2016 and the recently rolled out GST have time and again pushed the already sluggish residential market to the brink.

"These were the corrective measures long due to transform real estate into a robust, transparent and thriving sector". "The short-term hiccups grappling the sector would eventually fade away and bear rich dividends in the future", Baijal said.

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