Residential real estate – Year in Review 2019

While commercial real estate thrived during the year, 2019 was a challenging year for India’s residential real estate. The regulatory conditions paved the way for residential real estate all through January to December and may continue to do so for 2020. Real estate developers were continually assessing the dynamics of the market to ensure that supplies met the demand for the year. However, the sector did see a mix of positive and negative sentiments for 2019.
According to a JLL report, H1 2019 sales of residential units increased by 22 per cent compared to the corresponding period in 2018. During this period, real estate developers focused their attention on delivering existing products rather than launching new projects. In 2019, the total number of launches was much lower than that of the previous year. In locations such as Bangalore and NCR, prices remained stable in order to sell off unsold projects making 2019 the year that saw a major decline in unsold inventory.

Despite the many initiatives taken by the government and RBI in the previous year, the real estate sector in 2019 was rather sluggish. The decline in both sales and launches had a lot to do with the economic slowdown in India.

The sustained liquidity crisis during the year did not help either. However, the government had made some announcements in the second half of the year such as National Housing Bank raising liquidity to housing finance companies to help improve flow of funds for housing loans. To further make headway for the realty sector, the government also set up a Rs 25,000 crore Alternate Investment Fund (AIF) to help fund housing projects that are stuck providing them with the momentum that they require. This move by the government can help boost the economy at large providing relief to home-buyers.

Overall, the real estate prices have come down last year, especially through various discounts and offers. 2019 saw a rise in demand in mid and affordable segments and properties were launched across the top cities accordingly. 2019 has demonstrated the real estate developers knack for aligning the supply to changing demands and trends during the past year. With the stress on affordability, sales in these segments have gone up and are expected to keep growing in 2020.
Since the government announcements were only made in the second half of the year, 2020 is when the reforms are forecasted to bear fruit. As and when the measures and incentives are executed, they will lead to a positive impact on the realty sector. The industry would also like to see the upcoming budget reflect more relaxation to home-buyers in terms of cutting personal income tax. After all, it would be a boost to both the real estate sector as well as the economy.

Bangalore’s real estate has seen steady growth in the residential market. Pegged as the Silicon Valley of India, the city continues to attract residents towards its IT hubs and surrounding areas such as Bellandur, Thanisandra and Yelahanka. The migration of residents into Bangalore for work commitments has significantly boosted the Bangalore’s real estate. Last year saw Vajram real estate celebrate a sold-out property, Vajram Esteva, in Bellandur. Vajram Tiara is currently up for grabs in Yelahanka and, with the great offers and irresistible prices it sure is going to be sold out soon!

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