Realtybatters NBFC crisis, home sales grow just 6% in 2018
Real estate developers in 2018 shook off the previous year’s lethargy with 76% higher home launches, even as sales grew at a more sedate 6%, as a cash crunch in the latter part of the year crimped a sustained recovery.
The surge in home launches—1,82,207 units across eight cites including Mumbai, Bengaluru and the National Capital Region (NCR)—came after a slump in 2017 when the sector struggled under the impact of demonetisation and a tough real estate law, according to the half-yearly India Real Estate report by property consultancy firm Knight Frank India.
Around 60% of homes launched in 2018 were priced below ₹50 lakh, Knight Frank said.
In new launches, Mumbai saw the sharpest growth of 220%, followed by Pune (157%), which Knight Frank attributed to successful implementation of the real estate law in both these cities and the Supreme Court allowing resumption of construction in Mumbai, overturning a Bombay high court ban that cited inadequate dumping grounds in the city.
However, sales did not pick up as expected, despite a strong start in 2018, as the crisis at non-banking financial companies (NBFCs) towards the end of the year cast a shadow over housing finance. For full year, home sales rose 6% to 242,328 units, powered by strong demand for affordable and mid income homes. Bengaluru saw the sharpest sales growth of 27%, followed by NCR (8%) on the back stronger sales traction in Noida and Greater Noida.