PropTiger.com, part of Elara Technologies Pte Ltd which also ownsHousing.com and Makaan.com, today released the findings of its ‘Real Insight Report’ for Q4 FY’19. As per the report, homes sales in India’s nine key property markets declined 5% year-on-year (y-o-y) and new project launches fell 32% annually during Q4 FY’19. However, the unsold housing stock declined by 10% during the same period.
Mani Rangarajan, Group Chief Operating Officer, Elara Technologies said, “While there might not be any significant improvement in new launch and home sales numbers in the first quarter of FY20, things may start to change after the results of the Lok Sabha elections are announced. In fact, as more clarity emerges pertaining to GST issues, these numbers might see improvement in the quarters that follow. Property rates would also see an upwards movement in the times to come.”
Sales decline due to change in GST rules
As against 79,601 units in the Q4 FY’18, developers in the nine property markets together sold 75,706 units in the same quarter in FY19. The report attributes this decline in home sales numbers to the changes in the Goods and Services Tax (GST) transition rules.
The GST Council has given 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.
Despite an overall decline in numbers, home sales in some cities increased in Q4, including Hyderabad, Gurugram, Pune and Mumbai.
At 26%, homes sales increased the highest in Hyderabad in the quarter ending March 2019. Noida, on the other hand, saw sales declining 50% during the same period over the previous year. At 23%, home sales also fell significantly in India’s information capital Bengaluru.