Residential property sales grew by 8 per cent in April-June quarter as compared to January-March quarter of the previous fiscal on the back of government's emphasis on affordable housing, softening interest rates and stagnant prices, a study said.
According to a report by online property portal PropTiger, residential sales increased by 8 per cent in the first quarter of 2016-17, while project launches went up by 14 per cent to 41,000 units when compared to the last quarter (January-March) of 2015-16.
The study, which covered nine key cities of Mumbai, Pune, Noida, Gurugram, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad, revealed that due to the sops offered by the government for development of affordable housing, over 50 per cent of total launches were witnessed in this segment.
The pressure of an inventory overhang eased during the quarter from 38 months in January-March quarter to 35 months in Q1 of FY 2016-17, with an overall reduction in unsold inventory by two per cent over the previous quarter.
However, Gurugram and Noida are still reeling under the pressure of high inventory volumes. The government's policies and schemes to boost affordable housing seem to be giving results now.
As per the report, Ahmedabad and Hyderabad registered their highest quarterly sales during the past eight quarters. This was also coupled with a price increase in both cities - while Hyderabad saw the highest annual price appreciation of 8 per cent, it was closely followed by Ahmedabad at 7 per cent.
However, price trends in all other cities during the quarter remained range-bound. The quarter also saw reversal of sale trend for Gurugram and Noida, with both cities witnessing increase in sales after a gap of seven and four straight quarters respectively, it said.
"Residential real estate in the country is at its inflexion point, with improved activity driven by softening interest rates, stagnant prices and controlled supply," PropTiger.Com Business head (Consulting and Data Insights) Anurag Jhanwar said.
He said the subsequent quarters could see more action as implementation gains ground on account of the smart cities mission and AMRUT schemes, affordable housing and other infrastructure projects.
"Largely, the sales and prices are expected to be rangebound, with a positive bias in the short term," Jhanwar added.
