Mumbai: Even as residential launches dropped 41 percent in January-June period this year against H1 2016, the real estate sector witnessed a resurrection in the affordable housing segment, a recent survey said.
According to the survey conducted by property consultant Knight Frank, residential launches dropped 41 per cent to 62,738 units from 107,120 units in H1 2016, which was lowest in seven years.
"The residential market had barely come out of the demonetisation shock when the need for RERA compliance put breaks on a large section of new projects," the report said.
"However, the share of affordable housing under the Rs 50 lakh price segment in the total launches increased significantly by 71 per cent up from 52 per cent during the same period last year," it said.
Sales during H1 2017 also declined 11 per cent to 120,755 units as compared to 135,016 units in the corresponding period last year.
"However, as compared to the demonetisation-hit July-December 2016 period, H1 2017 reported a rise in sales. Government thrust towards affordable housing, widespread discounts on ready inventory and improved sentiments among buyers courtesy RERA has driven sales volumes," the report pointed out.
Described by many as the battery of reforms against the black economy in an unorganised sector, brave policy decisions such as demonetisation, RERA and the recently rolled out GST have time and again pushed the already sluggish residential market to the brink, Knight Frank India chairman and managing director Shishir Baijal told reporters here today.
He further said these policy decisions were corrective measures long due to transform real estate into a robust, transparent and thriving industry.
According to the report, barring Chennai, new projects dried up in all the eight cities.
NCR (National Capital Region) and Ahmedabad were worst hit with launches plummeting by 73 per cent and 79 per cent, respectively.
Sequentially, Mumbai picked by close to 62 per cent, albeit lower by 36 per cent year-on-year.
Chennai was the only market to record a marginal four per cent y-o-y rise in launches.
At 596,044 units, unsold inventory was at the lowest across eight cities in H1 2017, albeit owing to the shrinking market size.
As per the report, NCR was the worst market with over four years of inventory and there has been a surge in inventory in the 'ready for possession' category.
Office transactions fell by 10 per cent to 18.1 million sqft in H1 2017.
The five per cent decline in supply saw 17.9 million sq ft added to the office space inventory.
Except Mumbai and NCR, vacancy levels were low in other cities. Vacancy levels at prime CBDs in Mumbai and NCR in single digits, the report said.