Residential launches down by 17% in first half of 2017: Colliers Report
Residential property launches have declined by 17% in the first half of 2017 as compared to H2 of 2016 owing to implementation of the Real Estate (Regulation and Development) Act (RERA) and nationwide execution of the Goods & Services Tax (GST) according to the ‘Residential Property Market report’ released by Colliers International India.
As per the report, number of new launches is expected to further decline in H2 2017 as RERA and GST compliance will remain a challenge for several developers for at least the next six months. “Supply of new projects will remain restricted in the market in short to medium term but this will help to mitigate the oversupply situation in most markets. After the recent bank rate cut by RBI in July 2017, we do not expect any further rate cut in H2 2017. Also, the prices have been stabilised in most markets, and any further reduction is unlikely. Thus, buyers should expedite their buying decisions and take advantage of lower interest rate regime. The first-time homebuyers can also get benefit from the incentives under Pradhan Mantri Awas Yojna (PMAY)”, said Surabhi Arora, Senior Associate Director, Research, Colliers International India.
Colliers says that the residential market witnessed a 17% decline in the number of new launches since H2 2016 with 40,600 new units introduced in the first half of 2017 in prime cities. Mumbai and Bengaluru were at the forefront with 35% and 33% of total launches respectively, while Chennai, Pune and NCR accounted for the remaining 13%, 10% and 9% share.
“The segment that was impacted the most is luxury with the number of launches reduced considerably in this segment. Colliers forecasts similar sentiments to prevail in the next six months, with affordable housing grasping a major share in new launches,” the report said.