Property sale in India sees new high since demonetisation

Between January and June 2019 (H1 2019), the residential real estate market in India hit the highest levels of supply and sales since demonetisation. Unit launches increased by 21 percent year-on-year (YoY) to 0.11 million units, while sales grew by 4 percent YoY to 0.13 million units across eight cities, according to Knight Frank India’s half-yearly ‘India Real Estate’ report.

Notably, 51 percent of the launches in H1 2019 occurred in ticket sizes under ₹50 lakh and 78 percent under ₹1 crore. “The concerted efforts by the government and incentives have resulted in substantial demand in affordable housing which has boosted residential sales,” says Shishir Baijal, chairman and managing director, Knight Frank India.

Another report by JLL observed an uptick in residential real estate sales in H1 2019, with Mumbai, Bengaluru and Delhi NCR accounting for more than 60 percent of the total sales. Most of this growth was witnessed in the peripheral areas of the cities, says Ramesh Nair, CEO and country head, India, JLL. “The government lowered GST rates on affordable homes to 1 percent from 8 percent, without input tax credit. GST on projects under construction, which are not under the affordable housing segment, was reduced to 5 percent from 12 percent,” he points out.

The office property market across India’s top eight cities saw supply and transactions hit a decadal high. Supply grew by 31 percent YoY to 23.9 million sq ft in H1 2019.