Indian Property on the Move Again

Sales of Indian property have started to pick up again after a downturn partly due to the demonetisation introduced by the central government.

According to the latest report from real estate research firm Liases Foras, sales across top eight markets grew 4 per cent in the first quarter of financial year 2017-18 on a year-on-year basis while sequential growth stood at 6 per cent.

The residential Indian property market has been slow for a while following demonetisation to remove ‘black money’ in the system, but the realty market has now shaken off the impact, showing sales growth of 28% post demonetisation.

As is often the case however, growth depends very much on location. Kolkata witnessed the highest growth in sales at 27 per cent in the first quarter of the financial year 2017-18 on a yearly basis.

Strong sales growth was also seen in Mumbai Metropolitan Region at 23 per cent, Pune at 18 per cent, and National Capital Region and Ahmedabad at 17 per cent and 10 per cent respectively.

Other regions did not fare so well, with a dip in sales of 36 per cent in Chennai, 28 per cent in Bangalore, and a 22 per cent fall in Hydrabad.

Despite the uplift in Indian property sales, prices have remained fairly flat until now. The report said weighted average price in Tier I cities grew by 2 per cent and 1 per cent year on year and quarter on quarter, respectively. The average price across cities stood at Rs 6,764 per sq ft, up from Rs 6,660 per sq ft.

Managing director of Liases Foras, Pankaj Kapoor, said the highlight of the recent findings is the growth in sales volume across markets. ‘The growth is mainly on account of the traction in the affordable segment of the market. We have seen both demand and supply flow in the segment, making it an end user-friendly market.’

He continued: ‘We are witnessing good numbers despite RERA, GST and demonetisation, a sign that augurs well for the market in future. What has also helped the market overall is stable price over the last few years, giving buyers a benefit of time correction.’

With sales of Indian property now increasing it should only be a matter of time before prices start to rise again.

Overseas property investors considering Indian property should research their chosen areas carefully. As in all property investment, location matters.