Even as the government’s latest projected GDP growth numbers for 2014-15 pegs the growth rate at 7.4 per cent, the real estate sector is far from deriving benefit out of it and according to a report released by Cushman & Wakefield, the number of new residential launches in 2014 declined 12 per cent from 1,74,400 units in 2013 to 1,53,000 units in 2014 across the eight major cities.
While the first half of 2015 is expected to remain subdued, the report projects that positive steps from the government and regulatory authorities to boost the demand will do good to lift demand and development.
“Interest rate cuts by the RBI, incentives in Budget such as enhancement on rebate under income tax for home purchases, boost in savings will help lift the demand. Further, if the government can also increase the supply for affordable housing through faster approvals, financial support and incentives, we expect that the total number of unit launches will increase substantially,” said Sanjay Dutt, executive MD, South Asia, Cushman & Wakefield.
While Kolkata and Chennai are the only two cities in the list to have witnessed a rise in the number of launches, Hyderabad and Delhi NCR have seen the biggest percentage decline of 46 and 30 per cent respectively. Hyderabad witnessed the biggest decline in launches i.e. by 46 per cent and the report linked it to developers turning cautious following change in dynamics after bifurcation of the state.
Bangalore, NCR and Mumbai, which are the biggest markets in volume terms, accounted for almost 60 per cent of the total new launches in 2014 , which comes to about 92,700 units out of total 1,53,000 units.
Though the overall launches suffered, it was the mid segment which saw most of the activity with two thirds of the launches across all eight markets falling in that segment. The segment witnessed a five per cent rise in launches in 2014 over the previous year.
While the affordable and the high-end segment witnessed the biggest fall in launches by 38 per cent and 29 per cent, respectively, the luxury segment remained undeterred and the number of units launched in that segment jumped 400 per cent from 200 units in 2013 to 1,000 units in 2014.