Home sales dip 4% in March quarter on a quarterly basis

Sales in top nine cities fall to 51,000 units in March quarter of FY16, a report by PropTiger.com reveals

Residential sales in top nine cities has declined by 4% to 51,000 units in March quarter of FY2016, said a new report.

In the four previous quarters, sales have hovered in the range of 49,000 to 57,000 units and Q4 FY 16 decline has one of the lowest in the past nine quarters, said a report called ‘Realty Decoded’ by PropTiger.com

The study covered nine key Indian cities of Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

Commenting on the report, Anurag Jhanwar, business head (Consulting and Data Insights), PropTiger.com, said: “Affordability and end use are going to define rules of the game. 

The market is seeing a fundamental shift with end users emerging as the key buyer segment across all cities. Given the price sensitive behavior and demand for real use from this segment, the downside on both sales and prices, if any, is expected to be limited from here on”.

The residential market has witnessed over 97% of total demand coming from end users, the report said. The share of end users in total demand has been seeing a continuous increase, with the comparable figure standing at 77% mark from this segment in Q1, FY 16.

 According to the PropTiger study, Hyderabad was the only city to show a sales increase during the January-March quarter; the sales in the city grew five% over the same quarter the previous year. All other cities witnessed sales declines – of four% to 44% from Q4, FY15. Hyderabad also recorded an annual residential price appreciation of 6% closely followed by Ahmedabad with a price appreciation of five%. Over the past 11 quarters, Hyderabad has seen a price appreciation of 15%; Bengaluru has been a close second with a 13% increase during the period.

The report indicates that the ongoing lull in the residential market has reflected in a continuous fall in launches and absorption, affecting stakeholder sentiment. The sector is also grappling with a slow inventory movement of existing projects. Launch of new projects has declined 14% from the previous quarter and 51% when compared with the same period the previous year – all cities have seen declines in new launches, indicating a reduction in the activity levels across primary residential markets.