Realty sector getting back on its feet after demonetisation shock: JLL

Despite strong support from the government, residential sales this year are yet to reach pre- demonetisation levels in most cities but Hyderabad remains an exception, according to real estate consultant JLL India.

While Hyderabad registered the maximum sales, Delhi witnessed lowest levels during January-September 2019 period. Mumbai remains an exception to recovery in sales, it said.

The real estate sector has successfully weathered the storms of policy interruptions and economic downturns, JLL India said in a statement, adding, the year 2019 has so far been so good for the realty sector.

While the top three metropolitan cities of Mumbai, Delhi and Bengaluru have been the major focus of real estate activities, JLL research showed that Hyderabad is catching up fast.

Hyderabad topped the list with a 36 per cent sales penetration followed by Pune at 34 per cent.

Delhi registered the lowest sales penetration rate at 13 per cent followed by Kolkata at 17 per cent.

The city level analysis shows that Chennai registered its highest ever sales penetration since 2014 in the first nine months of 2019 at 33 per cent.

All other cities except Bengaluru have registered an uptick in the January to September period as compared to the same period last year.

The impact of demonetisation was prolonged only in Kolkata which registered a sales penetration of 17 per cent in January-September of 2019, considerably below the pre- demonetisation sales penetration level of 28 per cent.

Pune, Hyderabad and Chennai showed strong revival in sales along with other cities limping back to pre- demonetisation levels.

Hyderabad was one of the worst-hit cities, but it has not only recovered from the slump but also crossed the pre- demonetisation level and had the highest sales penetration level out of all the cities in the first nine months of 2019.

Mumbai, however, is the only city that has not yet shown any signs of recovery.

"In this backdrop, we see the short-term adverse impact of demonetisation gradually fading away. Moreover, the market participants: home buyers, developers and investors have made peace with unprecedented reforms such as RERA and GST", JLL said.