Developers like Lodha, Wadhwa post record sales amid Mumbai’s property slump

Developers like Lodha, Wadhwa post record sales amid Mumbai's property slump
Lodha’s New Cuffe Parade project. Picture Courtesy: Flickr

Housing sales have grown by 12 percent during the July-September period across nine major Indian cities when compared to the same period in 2015, according to a report by online real estate portal PropTiger.

The nine cities include Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Ahmedabad, Gurgaon, Noida and Pune. Off them, Mumbai, Pune and Bengaluru contributed around 57 percent of total sales in the second quarter of this fiscal.

“Prices have remained range-bound across the cities,” News Corp-backed PropTiger said in its report ‘Realty Decoded’.

The report also highlighted that developers across the top nine cities of India have been reluctant to reduce residential prices and have instead been offering deferred and flexible payment schemes to bring in buyers.

“The market seems to be finding its base with sales hovering at around the 55,000-unit range for the past two quarters,” said Anurag Jhanwar, Business Head (Consulting and Data Insights), PropTiger.com and Makaan.com.

“The increased focus of developers on execution and new launches mostly happening with prior approvals are expected to bring fence-sitters into the market,” he added.

With incentives such as spot discounts, flexible payment plans, waiver of registration, stamp duty and other charges to free whitegoods, gold coins and luxury cars, buyers across the country have multiple choices this festive season, Jhanwar said.

The inventory overhang remained unchanged at 35 months, indicating that demand is moving in tandem with supply. Unsold inventory across the top nine cities, including Mumbai, has declined.

Meanwhile, Mumbai’s biggest property developers like Wadhwa, Lodha and Oberoi Realty claim to have done exceptionally well in recent months.

According to a Business Standard report, Lodha posted sales of Rs 800 crore from projects such as Palava, Altamount, New Cuffe Parade and Amara.

Lodha, currently the largest developer by home sales, also expects sales of Rs 10,500 crore in FY17, about 63 per cent higher than the previous year.

Oberoi Realty too posted a threefold jump on a yearly basis in residential sales in the second financial quarter, at Rs 504 crore.

Wadhwa Group also said that said sales were up by 43 percent in Q2, after 20 percent growth in Q1. With sale of about 250 units, primarily in Atmosphere and Elite luxury projects, in the financial year’s first half (H1), the group has achieved 90 per cent the total volume of FY16.

According to experts, the sales are concentrated near projects which are relatively affordable and have visible construction.

“In Mumbai, apartments between Rs 70 lakh to Rs 1.5 crore are selling. But, some sort of construction should be visible at the site,” Balaji Raghavan, head, real estate practice, IIFL told Business Standard.

Factors such as developer’s credibility, construction quality, implementation capability, support infrastructure and timely delivery ensure that leading brands have an edge over others even during a market slowdown.

“In such scenarios, buyers don’t mind over-stretching their budget to accommodate the choicest apartment offered by leading brands, thereby mitigating the risk of delayed delivery in possession or non-possession,” Sumit Jain, national director at Colliers International, told the daily.

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