Residential launches decline 50% in FY20

BENGALURU: The top eight listed builders in the country launched just 15.7 million sqft of residential space in the first nine months of this fiscal, less than half of the 31 million sqft launched in the same period of 2018-19, according to data from property consultancy Anarock. Data from DLF, which is also listed, was not available. Builders held back launches for the reason that has been plaguing them for the past half decade; subdued demand from buyers and the fear of adding to the huge unsold inventory.
Sobha, which launched just 1.4 million sqft of residential apartments compared to 4.8 million in 2018, said to grow sales volumes in near future, dependency on new launches may be very minimal, as it has sufficient unsold inventory in the ongoing projects.
“We feel our inventory which is there today in area released for sale as well as the area not released for sale is sufficient for the run rate that we are achieving on the sales side at the same time,” chief financial officer Subhash Bhat said in a post earnings call with analysts last month.

The company said there were no delays related to approval for the 13 million sqft of new launches planned which are at various approval stages with the municipal authorities, fire and pollution control department. “We are comfortable with the current thing and not pushing the approval team for approvals right now,” Bhat added, referring to the RERA nod which can only be obtained after the clearances. Godrej Properties’ total launch volume fell to 7.5 million from 11.4 million, but the company attributed it to a delay in approvals. “While our overall sales number was moderate due to several launches getting delayed due to regulatory approval, we saw a strong uptick in sustenance sales during the quarter,” executive chairman Pirojsha Godrej said.
Anarock estimates India’s total unsold housing inventory to be worth $66 billion (Rs 5 lakh crore), out of which onethird is contributed by luxury housing, houses priced Rs 1.5 crore and above. A larger chunk, 40% is contributed by the affordable housing segment which witnessed the highest supply last year.
The luxury housing segment has borne the brunt of the uncertainty and slowness in the economy and a glut of unsold stock has also prevented a price rise for the segment, which was the major reason which drew investors between 2006 and 2010. The market was also badly impacted by demonetisation, which brought to a sudden halt significant cash transactions. Sobha has the majority of its unsold inventory between Rs 1-2 crore.
Mumbai-based Oberoi Realty said launch of its two projects in Goregaon and Thane will depend on “how the market plays out.” “Either it will be an April-May launch or probably in the early part of the second quarter, more towards the festive season. We are contemplating,” said Vikas Oberoi, chairman and managing director.


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