The homebuyers have found their way back to real estate for obvious reasons, with the onset of a big boost in the industry in two year for the favourable property price, cuts in goods and service tax (GST) and growing expectations of lower interest rates have challenged other industries returning the loyal consumers of real estate. Leaving out the steady improvement pace that this sector has taken the relatively lower number of launches is also supporting the market hobble back to regularity. The price of a property in Rajarhat is going to come down to price one had not imagined, the overpriced properties are now going to come under affordable apartments for the benefit of its buyers.
The unsold residential flats in Kolkata and the top 7 cities dropped to 30 months at the end of March quarter against 50 months in the corresponding period in 2017. This step indicates the number of months it will take to sell current unsold stock; a level of around 18 months is considered healthy experts said. The unsold housing stock in these markets declined about 16% over the two years to 665,000 units which are a long way from the low level 496,000 units in 2013. Since 2014 it has been kept captive with data suggestive of a subsequent decline. Average property price across the cities have remained status quo and has seen even less than 2% rise in the past two years that is Rs. 5,480sq/ft in the first quarter of 2017 to Rs. 5,570sq/ft in 2019’s first quarter (January to March). The stable government in the center is expected to raise the buyer confidence further and increase the housing sales pace in the approaching quarter. The housing sales in the March quarter gushed to 71% to 78,520 units in the top seven cities from 46,000 in the same time period which was two years back.
While the top seven cities saw an increasing drop of 16% in the entire unsold housing stock in two years. Property in Rajarhat boosted increasingly in these two years whereas Bangaluru witnessed a sharp decline. Housing inventory was cut down by 44% to 66,820 units in March quarter from 118,700 units two years back. Hyderabad, on the other hand, came rolling right after with a 21% decline in the same time period. The certainty in real estate is defiantly back with a boost, the lower home loan rates and steady growth in the general economy did not fail to bring back the confidence to the home buyers therefore in order to avoid risks of execution and financing the buyers prefer to purchase almost complete or ready-to-move-in apartments. Delhi-NCR witnessed the unsold stock decline considerably 18% in two years, leaving behind huge markets like Mumbai Metropolitan Region (MMR) cleared only 4% inventory. NCR has halved the unsold housing which was hooked away for 90 months to 45 months in two years.
In a Consumers Sentiment Survey done by Anarock, the survey showed that 60% of the property pushes in 2019; this is noted that the favorable property price, GST rate, multiple sops for the first time has played as the main player in the budgets of home buyers and hence improvement is evident. The government has taken down the GST rates for affordable housing from 8% to 1% without input tax credit (ITC) and 12% to 5% for other projects. The Reserve Bank of India since December has turned its benchmark rate by 50 basis points to 6% in the expectation that the housing loan interest rates would decrease. The residential flats in Kolkata will defiantly be profited with these changes being implemented.
The mortgage rates have reduced after the period under review. State Bank of India (SBI) chopped down the Marginal Cost Based Lending Rate (MCLR) by 5 bps across all tenors. The largest lender, SBI was the second rate that was cut down in a month. With the reduction of MCLR, the home loan rates have gone down since April 10 which was at 15 basis points. In the past few months, many other banks are cutting off MCLR systematically.
By LNN (Liyaans News Network)