Home buyers make a comeback; reforms, lower interest rates help

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MUMBAI: The pent-up demand for housing is now getting converted into actual sales. While industry experts have been terming the scenario as buyers’ market for some time, home buyers themselves seem to have become more active now.

The performance of some of the listed real estate companies in terms of residential sales over the past one year indicates that things are looking up.

Lower home loan interest rates and the government’s impetus on affordable housing have played a key role in this. The government has supported the housing sector through affordable housing fund, lower Goods & Services Tax (GST) rates, increased tenure of loans under the Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) and extended income tax benefits to apartments of carpet area of 645 sq ft.

“Growth has been there in most parts of the country. There could be some pockets where the growth has been slightly slower than what one would have expected, but per se the growth has been strong,” said Keki Mistry, VC & CEO, HDFC, that has recently reported 26% growth in individual loans in FY18. “The massive focus that the government has put on the housing sector has been the biggest driver in recent times...RERA has helped in making people more confident about buying homes.”

On Friday, Godrej Properties reported 152% on-year growth in the value of bookings for FY18 at Rs 5,083 crore. The company’s highest-ever sales in any financial year was led by booking volume of 6.26 million sq ft.

During the fourth quarter alone, the company’s booking value saw 210% on-year growth at Rs 1,054 crore. “For the first time in its history, GPL has delivered sales of more than Rs 1,000 crore for four consecutive quarters. We look forward to building on this momentum in FY19,” said Pirojsha Godrej, executive chairman, Godrej Properties.

For Bengaluru-based Sobha also, the fourth quarter and the full financial year turned out to the best-ever in value terms, with growth across regions and product categories. It has registered new sales volume of 3.63 million sq ft, valued at around Rs 2,861 crore during the year with annual sales volume and values rose 21% and 42%, respectively.

While the company’s core market Bengaluru registered highest-ever sales performance both in volume and value terms, performance in Kochi and Gurgaon also improved during the year.

Mumbai-based listed real estate developer Indiabulls Real Estate also posted 20% on-year rise in both sales value at Rs 3,000 crore and 600 apartments, respectively, during the year. Interestingly, not only affordable or mid-income but premium segment also contributed to the company’s performance during the year as the company achieved nearly 100% sales at its Indiabulls Blu project accounting for over Rs 5,790 crore in value.

“The market hasn’t come back for everyone. We are seeing buyers move towards stronger and quality brands. Pricing has become more competitive; apartment configurations have also become efficient. Financing schemes have also helped. For buyers, capital appreciation is not the most important aspect as much as choices of good quality apartments, which may not remain in the market, given the improved demand,” said Anuj Puri, chairman, ANAROCK Property Consultants.

Source- ET Realty