As feared, India's property market continued its decline through the initial months of 2019 as well. According to the Real Insight Report released on Monday, home sales in nine of India's most important real estate market areas fell 5 per cent year-on-year, while new project launches declined by 32 per cent.
As against almost 80,000 property sales in the first three months of 2018, sales fell to just above 75,000 in the corresponding period this year. The Q4 Real Insight Report was released by PropTiger.com, a digital real estate advisory firm owned by Elara, a Singapore-based tech firm.
Except for few markets like Hyderabad and Gurugram, real estate showed negative growth across the country. In places like Noida-Greater Noida, the sale decline was as much as a whopping 50 per cent. Bengaluru, once a boom town, saw home sales drop by 23 per cent.
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The report attributes this fall in home sales to the changes in the Goods and Services Tax (GST) rules. The GST Council had given real estate developers time till May 10 to choose between the old tax rates and the new rates to help resolve input tax credit issues. Realtors opting for new GST rates, which are lower than the old rates, will not be able to claim input tax credit.
“Things may start to change after the results of the Lok Sabha elections are announced,” hoped Mani Rangarajan, group COO of Elara Technologies. “As more clarity emerges pertaining to GST issues, numbers might see improvement in the (months) that follow. Property rates would also see an upwards movement in the times to come.”
The coming into effect in 2016 of RERA, the Real Estate Regulation Act, has also put a dampener on sales, if the report is to be believed. “Developers have been cautious about launching new projects as the law imposes strict penalties in case of project delays. Huge unsold housing stock has also been forcing developers to refrain from launching new projects and focus on selling the existing inventory,” said a press release from PropTiger.