CREDAI-JLL Report Reveals 25% Surge in Residential Sales
The CREDAI-JLL report pointed at a significant increase in sales velocity, recording a rise of whopping 25% y-o-y with sales at over 64,000 units while another report by CREDAI-Cushman & Wakefield displayed heightened PE investment of INR 10,080 Crores in Q2, 2018. CREDAI released these reports at the CREDAI NATCON 2018, at its 18th annual international convention held in Berlin, Germany recently. It shows an unprecedented growth displayed by the real estate industry in India, informed Shantilal Kataria, President, CREDAI Maharashtra.
NATCON 2018 saw over 1000 member developers and experts from the real estate sector, senior professionals from the financial world and ancillary industries participate in the three-day long convention.
On this biggest platform, CREDAI also put forth robust demands for incentivizing developers to participate in affordable housing to continue the growth momentum. Some of the demands were enabling tax benefits to projects registered prior to 1st June, 2016, reducing land area utilization to 50%, a 12% GST with ITC and 2/3rd land rebate in metro cities, Development Rights (DR) in Joint Development Agreement (JDA), redevelopment agreements and Transfer of Development Rights (TDR) exempt; Housing loan interest deduction against ‘Rental Income’ for self-occupied property increased to Rs. 5,00,000 for realizing the Government of India’s vision of “Housing For All”, added Kataria
While addressing the eminent gathering Satish Magar, President-Elect, CREDAI National said, “CREDAI has set benchmarks and showcased strong commitment in paving the way for the growth of Real Estate sector in implementing the policy changes towards Indian realty’s growth. The effort has helped in the revival of the sector and laid a strong foundation in demonstrating the efforts to transform the sector and bring its issues to the forefront.”
According to CREDAI-JLL Report, the increased demands in real estate sector pertaining to investments and residential housing can be attributed to two factors, firstly returning buyers’ confidence on account of implementation of RERA in most states and stable capital values that have started to show an upward bias. These two factors have pushed the home buyers to take the purchase decision. This is despite the fact that the RBI has increased its REPO rate in the third monetary policymaking borrowing for home loans dearer.
As per the JLL report, Mumbai saw the highest sales volume totaling over 13,600 units in H1 2018. Bangalore followed closely with 13,300 units and recorded a marginal increase of 2% in sales y-o-y. Pune, which also saw a minor increase of 2%, in sales volume recorded at approximately 10,000 units. Both these markets saw steady trends closely mirroring the market activities from H1 2017.
The CREDAI – Cushman &Wakefield report displayed office sector recording inflows of INR 4295 crores (USD 0.6 bn), which is a 39% increase from the corresponding quarter last year. This segment constituted almost half of the investments committed by foreign investors, the retail segment constituted 26% and industrial segment had a 10% share in investments by foreign investors. Office sector took the lead in investment activity making up for 42% of leasing activity during Q2, 2018, while, the average deal size increased by 21% YoY at INR 560 cr during Q2 2018, Mumbai attracted highest PE investment at INR 2800 cr followed by Chennai and Delhi NCR.
Another joint report unveiled by CREDAI – CBRE at NATCON 2018 indicates an influx of 500+ mn. sq. ft. of a new office, retail, warehousing and residential supply in India’s real estate by 2021, owing to positive reforms and strong investments. In the office segment, leasing activity in the first half of 2018 has already crossed 20 mn. sq. ft with Bangalore, Delhi NCR, Hyderabad and Mumbai accounting for more than 80% of leasing activity. While the industrial and logistics segment witnessed a take-up of almost 10 million sq.ft. of space in H1 2018, which was equivalent to the entire annual take-up of the year 2015.
The notable speakers at the annual convention in some of the other panels included Renu Sud Karnad, MD- HDFC Ltd., Khushru Jijina, MD- Piramal Capital & Housing Finance Ltd., Anuj Puri, Chairman- Anarock Property, Hafeez Contractor, Renowned Architect, Rajiv Sabharwal, MD & CEO- Tata Capital and Manisha Natarajan, Group Editor- Real Estate & Urban Development, Network 18.