NEW DELHI: Residential real estate prices fell across the country in 2017 due to demonetisation, the implementation of the Real Estate Regulation Act+ (RERA) and goods and services tax+ (GST).
According to a Knight Frank report, prices fell by an average of 3% across cities, with Pune witnessing the highest decline, 7%, followed by Mumbai at 5% in 2017. Prices in the NCR, which had already fallen in the last six years, dropped another 2% on average.
20,000 projects under Rera so far
The main reason for the fall is poor demand. Sales in Bengaluru, NCR Delhi and Chennai fell sharply — 26%, 6% and 20%, respectively. However, the Mumbai and Pune markets witnessed a slight upward movement. The report pointed out that as RERA had been implemented properly in Maharashtra, sales had picked up in Mumbai and Pune by 3% and 5%, respectively.
Because of slow sales, launches witnessed an unprecedented slowdown during the year. New launches fell by 56% in NCR Delhi and by 41% in Bengaluru. This has affected the sector badly.
NCR witnessed 6% lower sales at 37,653 units while prices fell by 2% due to a slowdown in demand and the impact of new realty law RERA and GST, said property consultant Knight Frank India.
The report also pointed out that that the share of affordable homes among new launches rose from 53% in 2016 to 83% in 2017, indicating developers’ focus on properties within the Rs 50 lakh price bracket. The main reason for the launch of affordable housing is the huge demand in the segment and the subsidies under the Prime Minister Awas Yojana.