Property consultancy Knight Frank has released a report on India’s realty space. The report talks about residential market performance in second half of 2019, it says home sales grew a mere 1 percent and pace of new launches have also eased in 2019.
To discuss the report and India's realty market in detail, CNBC-TV18 spoke with MR Jaishankar, CMD, Brigade Enterprises and Gulam Zia, Executive Director, Knight Frank.
Zia said, “The launches have slightly gone down in the second half of this year. However, the main message is that the housing real estate is resilient. The residential sales has actually gone up slightly by 1 percent.”
“When I am using the word resilience, I am talking about the volumes and that is something of a good news because we are holding on to volumes," said Zia.
He further added the price drops have not been as bad. "If I look at last three year situation and compare various different markets Mumbai and Pune may still be looking at some price drop but the other markets are actually holding on, like in Bengaluru, the prices last year haven’t really gone down. Same is the case with NCR, where they are actually inching up. In Hyderabad, we have seen almost 10 percent rise in prices in last one year. So different markets are behaving differently, so net-net prices are stabilising.”
On the pricing front, Jaishankar said there has been a marginal improvement in prices. "As far as the customer is concerned, considering that the developers have absorbed the inflation of the last 3-4 years, they are getting a great deal. However, now we are seeing a pent-up demand of last 3-4 years."
"We are positive that things should be much better subject to the macro environment holding on in 2020, " added Jaishankar.
Talking about sales value and volumes, Jaishankar said, "As far as Brigade Enterprises is concerned we are doing quite well. We have seen a 33 percent jump in sales in FY20 compared to FY19. We do expect a price improvement of anywhere between 5-7 percent in 2020.
Moreover, with government planning to spend huge amount on infrastructure, the prices of cement and steel are likely to go up and that will have a cost push effect on real estate prices. Generally, Both in leasing and residential sales, we are expecting a substantial improvement in 2020," said Jaishankar.
Agreeing with Zia, Jaishankar said there has been improvement in prices in Hydrebad and Bengaluru, as well as Chennai.