The IT city has emerged as the most active residential property market in the country over the last two years, with overall housing sales rising by 80% in the first quarter of 2019 against the same period in 2017.
Overall unsold stock has also declined by 44% during the same period — the maximum among top cities, data from ANAROCK Property Consultants showed.
“Builders cautiously focused on releasing less new supply in the market and instead focused on sale of old projects. This, invariably, led to increased housing sales. At any given point, an inventory overhang within 18 months is considered a healthy market,” said AnujPuri, chairman – ANAROCK Property Consultants.
With rising sales backed by rising consumer demand, India’s Silicon Valley has seen the overhang of residential inventory declining to 15 months by the end of the first quarter of 2019 from 42 months in the first quarter of 2017, according to the report.
Fresh supply went up by around 39% during the period, it said.
“There has been a remarkable growth in the Indian real estate industry and the sector is regaining visibility and viability. The past year witnessed a significant rise in demand for affordable housing,” said Ashish R Puravankara, managing director, Puravankara. The group sold 1,148 units in the last quarter of FY19, a rise of 117% compared with the third quarter, when the sales were 528 units.
Unprecedented commercial growth, backed by burgeoning startups over the last few years, has inevitably raised disposable incomes of IT/ITeS professionals and new entrepreneurs. It is this new and young population that is driving housing sales in the city.
“Much to their delight, prices were also fairly attractive and couldn’t possibly get lower than this. Alternatively, to clear unsold stock, developers also offered attractive deals and discounts to them,” said Puri.
Fresh supply during the last two years remained largely limited, compared to other prominent cities like Pune, Chennai and the Mumbai Metropolitan Region, which saw new launches increase by 279%, 118% and 79%, respectively.
The residential markets are coming out of a seven-year downturn and select micro-markets will bottom out in 2019 and 2020, Puri said.
The real estate sector’s revival, however, hinges on developers’ ability to secure liquidity at favourable terms and an uptick in demand through improved market sentiment.