2019 was not all about doom and gloom in India's residential real estate industry. While the industry is not out of the woods just as yet, there is some encouraging news that points to greenshoots. Knight Frank India's India Real Estate: H2 2019 report shows that across the country's top eight cities, the residential real estate market recorded a marginal growth of one per cent in sales volume during the year.
The overall sales volume in 2019 was at 245,861 units versus 242,328 units in 2018. The consultancy said that the marginal rise was due to improving affordability as "developers aligned themselves with the needs of home-buyers by reducing ticket-sizes and unit-sizes in a bid to encourage sales".
Bengaluru registered the highest increase in sales at 10 per cent, followed by Hyderabad and Kolkata at nine per cent each, and Chennai at eight per cent in the second half of 2019. NCR saw a marginal rise of two per cent in sales, while MMR and Pune witnessed a de-growth of 14 per cent and 10 per cent, respectively, the report stated.
New residential unit launches across the eight cities, meanwhile, rose 23 per cent in 2019 to 223,325 units. The growth in launches was more pronounced in the second half of 2019, pointing to the greenshoots. Knight Frank stated that 61 per cent of the launches in the second half of 2019 were in the ticket sizes under INR 50 lakh while 81 per cent were under 1 crore. Affordable housing is a reality developers can't ignore any longer.
Unsold inventory across the top eight markets declined five per cent to 445,836 units. Mumbai has the highest amount of unsold inventory at 145,301 units, followed by NCR at 122,084 units and Bengaluru at 78,414 units, the report pointed out. The inventory overhang indicates that the residential segment needs more time to be back in the groove. Things are rocking on the office market side, meanwhile.
The consultancy stated that "the office market recorded its historic best year in terms of transaction volumes in 2019, recording 60.6 million square feet (msf), backed by a surge in leasing activity by the Information Technology segment. New completions surged by 56 per cent in 2019 and was recorded at 61.3 msf, marginally surpassing demand". Bengaluru led the new supply at 16.1 msf in 2019, followed by NCR at 12.3 msf and Hyderabad at 10.9 msf. The IT sector accounted for 41 per cent of the total office space leased in the second half of 2019.Gold price slips from 7-yr high as investors shrug off US-Iran tension