Housing sales fell by 4 per cent to 2,63,720 units last year, lowest since 2010, in the eight major cities of the country on account of demand slowdown in the real estate market despite interest rate cut by the RBI.
The National Capital Region (NCR) continued to be the worst performing market in India with sales and launches at six year low, property consultant Knight Frank said in its report released today.
Launches of new homes fell by 21 per cent in 2015 at 2,44,944 units in the primary market of eight major cities - NCR, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad and Ahmedabad.
The unsold inventories have declined marginally to 6.91 lakh units from nearly 7.15 lakh units in 2014. Developers would take more than 2.5 years to exhaust this unsold stock.
Commenting on the report, Knight Frank India CMD Shishir Baijal said: "2015 for Indian real estate had both the good and bad news. While the office market grew from strength to strength, residential did not perform as expected."
Residential segment continued to face slowdown with launches at a five year low, despite the festive season.
"Sales in 2015 were lower than 2014 levels. Despite the 125 bps rate cut by RBI, demand did not see an uptake. Our outlook for 2016 remains muted. To further revive the demand, it is important to transmit the benefits of the rate cuts to consumers," Baijal said.
In the Delhi-NCR market, housing sales fell marginally to 48,503 units in 2015 from 48,630 units in the previous year.
However, launches of new homes fell by 20 per cent to 63,458 units in NCR. The unsold inventory in NCR stands at 2.06 lakh units at the end of 2015.
On housing prices, Knight Frank India National Director (Residential Agency) Mudassir Zaidi said the prices grew by an average 3 per cent last year. However, he said the rate of growth has come down from 9 per cent to 3 per cent in the last 36 months.
In contrast to the housing segment, Knight Frank India's Executive Director (North and Capital Markets) Rajeev Bairathi said the office space absorption stood at 40.4 million sq ft, highest since 2012, in six cities - Mumbai, NCR, Bengaluru, Chennai, Hyderabad and Pune.
Delhi-NCR witnessed absorption of 7.4 million sq ft of office space last year.
"Supply of quality office space is now a concern with vacancy levels at an eight year low. Rentals have firmed up as a result," he added.
Among sectors driving growth, IT/ITeS continues to lead with start-ups. "This year, however, we saw e-commerce and start-ups contribute to the office space uptake in a major way. Going forward, we have to wait to see if this trend continues," Bairathi said.
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The panel recommended that the Ministry should consider opening an online complaint facility to receive reports of deserving but deprived beneficiaries, those undeserving, delay in disbursal.
It said the facility should be activated not only while finalizing the list of beneficiaries but during the implementation of the scheme as well, so that the inaccuracies are always open to scrutiny.
The parliamentary committee noted with "disdain" that the Gram Sabha's powers are "often" exercised in part by the sarpanch in matters of addition to and deletion from beneficiary lists of the scheme.
"Efforts should be made to ensure that only the Gram Sabha and the village communities in the Sixth Schedule areas as a collective body exercise such right and no intervention should be made by any functionary," it said.
Under the heading construction of houses under IAY, the report said that actual complete construction of houses under IAY falls "far short" of the number of houses sanctioned and granst released.
A staggering 12.28 lakh houses, sanctioned prior to 2013-14, 22.35 lakh houses sanctioned in 2013-14 and 2014-15 are yet to be completed, the report said terming it as "huge" which implies a "serious gap" in implementation.
"The committee notes that 'AwaasApp' had been developed to enable inspection of progress in construction which is being used by 13 states. The committee recommend that the app should be mandatory in all states and UTs as a tool of inspection," it said.
On quality of construction, it suggested that the National Institute of Rural Development be engaged to develop more housing designs which are of good quality, using locally available materials and aspects of cultural and aesthetic traits be included in the mason training curriculum.
Among other observations and suggestions, the committee noted that in 22 states, stipulated state-level vigilance and monitoring committee meetings were not held and in contravention of IAY guidelines, social audit of IAY was not conducted.
It envisaged the convergence of IAY with other schemes such as National Rural Water Supply Programme and Rajiv Gandhi Grameen Vidhyutikaran Programme so that benefits under these schemes can be extended to IAY beneficiaries.
