Realty Decoded– Q2 FY’18October 2017
1Source: PropTiger DataLabs Sep’17
Executive Summary
• Q2 FY’18 was the first full quarter in the new RERA and GST regime and as expected both new launches and sales struggled in this quarter. On a year on year basis
- New launches dropped by 53% over Q2 FY’17- Sales dropped by 18% over Q2 FY’17- Inventory overhang increased to 42 months from 35 months in Q2 FY’17
• Amongst the top 9 cities only Mumbai and Gurugram had shown improvement in both new launches and sales. Market in Gurugram was driven by affordable housing under Haryana Affordable Housing Policy 2013 and market in Mumbai benefited out of early implementation of RERA
• Sales showed a marked improvement in September over July and August, driven by festival offers launched by most developers. Festival offers worked very well in Mumbai, Pune and Bangalore but could not yield similar results in Noida, Chennai and Hyderabad
• Though overall sales dropped by 18%, ready to move in units sales have consistently grown at 21% annual rate whereas sales of under-construction units have de-grown at 22% annual rate over last 4 years. Even in under-construction units, sales of older projects have been better than newly launched
• Ahmedabad and Chennai have highest share of ready to move in units in unsold stock• Units which were priced in the budget of <50 Lakhs contributed > 50% in new launches as well as in sales• Average prices are finally sloping upwards in Gurgaon, Mumbai and Hyderabad after a long stagnation
2Source: PropTiger DataLabs Sep’17
Residential Landscape: Top-9 cities as of Q2 FY’18
Notes: 1. Y-o-Y is comparison between the corresponding quarter of the previous year and the current quarter2. BSP is represented in Rs./sq.ft. 3. Inventory overhang is represented in months.
Pune and Noida witnessed steep increase in launches over the previous quarter. Except Gurgaon which saw few big affordable housing allotment, all other cities have seen decline in sales.
Y-o-Y (%)
Launches -91%
Sales -46%
BSP 2%(2,960)
Inventory Overhang
-72%(50)
AHMEDABAD BENGALURU Y-o-Y (%)
Launches -58%
Sales -27%
BSP 2%(4,926)
Inventory Overhang
-19%(37)
Y-o-Y (%)
Launches -91%
Sales -23%
BSP 1%(5,052)
Inventory Overhang
-58%(40)
CHENNAI
Y-o-Y (%)
Launches 85%
Sales +60%
BSP 9%(6,024)
Inventory Overhang
47%(35)
GURUGRAM Y-o-Y (%)
Launches -89%
Sales -18%
BSP 4%(4,132)
Inventory Overhang
-39%(29)
HYDERABAD Y-o-Y (%)
Launches -92%
Sales -21%
BSP -1%(3,831)
Inventory Overhang
-26%(39)
KOLKATA
MUMBAI Y-o-Y (%)
Launches 19%
Sales 6%
BSP 4%(8,672)
Inventory Overhang
-26%(54)
NOIDA Y-o-Y (%)
Launches -51%
Sales -29%
BSP -2%(3,896)
Inventory Overhang
-26%(68)
Y-o-Y (%)
Launches -37%
Sales -32%
BSP 1%(4,952)
Inventory Overhang
-96%(45)
PUNE
3Source: PropTiger DataLabs Sep’17
Despite festival season, most key parameters were in red
Launches
Sales
Inventory Overhang
Q2 FY’17 Q4 FY’17 Q1 FY’18 Q2 FY’18Q3 FY’17
Price Trend
14% -8%
-1% -16%
0% 0%
0% 23%
Residential Trends in top-9 cities* Q-o-Q
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
Strong/Marginal Decline
Stable
Strong/Marginal Increase
/
/
19%
13%
-1%
-16%
-43%
3%
1%
-5%
-25%
-16%
13%
2%
4Source: PropTiger DataLabs Sep’17
1…………... Launches:
RERA Continued To
Impair Launches
5Source: PropTiger DataLabs Sep’17
75,35779,343 73,433
50,594
36,774
42,26936,275
41,31347,032 43,253
51,521
29,60622,115
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Q2 FY'15
Q3 FY'15
Q4 FY'15
Q1 FY'16
Q2 FY'16
Q3 FY'16
Q4FY'16
Q1 FY'17
Q2 FY'17
Q3 FY'17
Q4 FY'17
Q1 FY'18
Q2 FY'18
Total number of launches in top-9 cities*
Launches continued to be impacted by RERA and were 53% lower than Q2 FY’17
# of units
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
- 53%
6Source: PropTiger DataLabs Sep’17
6,75
2
5,64
7
4,19
2
1,33
1 3,49
2
8,02
7
8,08
4
2,19
2
7,31
5
581 2,
363
381
2,46
0
383
675
9,58
4
1,08
4
4,60
4
0
5,000
10,000
15,000
20,000
Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune
Total unit launches – Q2 FY’17 vs Q2 FY’18 Q2 FY'17Q2 FY'18
Except Mumbai & Gurugram, decline in launches was consistent across cities
# of units
Notes: * Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments and villas across the regions.
7Source: PropTiger DataLabs Sep’17
20% 22% 23% 20% 16% 14% 18% 20% 23% 24%40%
20% 25%
36% 30% 35%33% 41%
32% 27%33%
38% 36%
27%
29%31%
19% 23% 16% 25% 21%
17% 24%21%
17% 19%16%
27% 16%
10% 8% 8% 8% 10%
12%11%
8%9% 9%
8%11%
8%
15% 17% 18% 14% 12%25% 20% 18% 13% 12% 9% 13%
20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q2FY'15
Q3FY'15
Q4FY'15
Q1FY'16
Q2FY'16
Q3FY'16
Q4FY'16
Q1FY'17
Q2FY'17
Q3FY'17
Q4FY'17
Q1FY'18
Q2FY'18
Q-o-Q budget-wise unit launches in top-9* cities
< Rs.25 Lakhs Rs.25-50 Lakhs Rs.50-75 Lakhs Rs.75-100 Lakhs > Rs.1 Crore
After decline in Q1 FY’18, share of affordable housing again crossed 50% mark in Q2 FY’18
% of units
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
8Source: PropTiger DataLabs Sep’17
2……Consumer & Demand :
Sales Momentum Subdued
9Source: PropTiger DataLabs Sep’17
80,36676,739
65,78957,245
48,97653,457 51,550
55,500 54,721
43,512
51,715 53,352
44,755
0
30,000
60,000
90,000
Q2FY'15
Q3FY'15
Q4FY'15
Q1FY'16
Q2FY'16
Q3FY'16
Q4FY'16
Q1FY'17
Q2FY'17
Q3FY'17
Q4FY'17
Q1FY'18
Q2FY'18
Sales trend in top-9 cities*
Sales declined by 18% over the Q2 FY’17 primarily due to slow RERA registration
# of units
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
-18%
10Source: PropTiger DataLabs Sep’17
4,12
8
9,55
7
3,84
9
2,09
0 4,10
5
3,77
8
11,4
62
5,10
4
10,6
48
2,22
2
6,97
6
2,94
5
3,34
2
3,35
6
2,99
3
12,1
01
3,60
6
7,21
4
0
5,000
10,000
15,000
20,000
Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune
Total unit Sales – Q2 FY’17 vs Q2 FY’18 Q2 FY'17Q2 FY'18
Only Gurugram and Mumbai have shown improvement in sales compared to other cities
# of units
Notes: * Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments and villas across the regions.
11Source: PropTiger DataLabs Sep’17
9,050 8,762 9,170 9,756 11,495 15,065 17,135 16,750 19,399
2,23,498
1,99,179
1,63,497 1,58,1131,39,719 1,39,025
1,19,217
94,04384,408
0
50,000
1,00,000
1,50,000
2,00,000
2,50,000
H1 FY'14 H2 FY'14 H1 FY'15 H2 FY'15 H1 FY'16 H2 FY'16 H1 FY'17 H2 FY'17 H1 FY'18
Sales in top-9* cities: Completed vs Under-Construction projects
Completed Under Construction
Sales of ready to move in units continued to grow unlike reduction in under-construction unit sales
# of units
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
21%
-22%
CAGR
12Source: PropTiger DataLabs Sep’17
Even in under-construction units, sales improved in older projects compared to newly launched projects
# of units
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
Period% Change
(H1FY’18-o-H2 FY’17)
Units sold in ≤ 6 months old projects -27%Units sold in 7-12 months old projects 16%Units sold in > 12 months old projects 14%
67,663
54,726
35,301 34,331 33,03927,877
20,440
29,888
19,57213,843 12,556 12,388 9,443 10,944
75,54068,230
57,077 58,12064,794
57,907
65,775
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
H1 FY'15 H2 FY'15 H1 FY'16 H2 FY'16 H1 FY'17 H2 FY'17 H1 FY'18
Sales in top-9* cities: New projects vs old projects
Units sold in ≤ 6 months old projects Units sold in 7-12 months old projects Units sold in > 12 months old projects
13Source: PropTiger DataLabs Sep’17
17% 18% 19% 17% 16% 17% 17% 17% 15% 17% 22% 18% 20%
39% 38% 37% 35% 36% 36% 35% 35% 36% 37%36%
36% 32%
20% 21% 19% 23% 21% 19% 20% 20% 21% 20% 18% 21% 20%
9% 8% 8% 9% 10% 9% 10% 10% 10% 9% 8% 9% 9%
15% 15% 17% 16% 17% 19% 18% 18% 18% 17% 16% 16% 19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q2FY'15
Q3FY'15
Q4FY'15
Q1FY'16
Q2FY'16
Q3FY'16
Q4FY'16
Q1FY'17
Q2FY'17
Q3FY'17
Q4FY'17
Q1FY'18
Q2FY'18
Sales in top-9* cities by budget segment
< Rs.25 Lakhs Rs.25-50 Lakhs Rs.50-75 Lakhs Rs.75-100 Lakhs > Rs.1 Crore
< Rs. 50 Lakhs segment continued to play a larger role in sales
% of units
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
14Source: PropTiger DataLabs Sep’17
Gurugram tops the charts for sales in < Rs. 25 Lakhs during the quarter owing to successful affordable housing policy
28%
3%10%
61%
4%
25% 20% 17% 23%
37%
37%39%
7%
35%
42%
20%
47%43%
13%
30%22%
6%
30%
16%
17%
18%21%
7%11% 11% 7% 13%
7%
11%
7%7%15% 19% 18% 19% 18%
10%
32%
11% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%> Rs.1 Crore
Rs.75-100 Lakhs
Rs.50-75 Lakhs
Rs.25-50 Lakhs
< Rs.25 Lakhs
% of units Budget-wise Sales in top-9* cities – Q2 FY’18
Notes: * Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments and villas across the regions.
15Source: PropTiger DataLabs Sep’17
3………Inventory:
Inventory Overhang Erodes
16Source: PropTiger DataLabs Sep’17
23 25
2933
3735
3835 35
46
3937
42
0
5
10
15
20
25
30
35
40
45
50
Q2FY'15
Q3FY'15
Q4FY'15
Q1FY'16
Q2FY'16
Q3FY'16
Q4FY'16
Q1FY'17
Q2FY'17
Q3FY'17
Q4FY'17
Q1FY'18
Q2FY'18
Q-o-Q overall inventory overhang in top-9* cities
Inventory overhang at the end of Q2 FY’18 increased to 42 months due to drop in sales during the quarter
# of months
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
17Source: PropTiger DataLabs Sep’17
Hyderabad & Gurugram have the lowest inventory overhang at the end of Q2 FY’18
AhmedabadBengaluru
ChennaiGurugram
Hyderabad Kolkata
Mumbai
Noida
Pune
20
25
30
35
40
45
50
55
25 30 35 40 45 50 55 60 65 70
Age of unsold inventory (months)
Age of unsold inventory vs inventory overhang in top-9* cities(Sep’17)
Inventory overhang (months)
Notes: Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.Size of the bubble indicates total inventory in units.
18Source: PropTiger DataLabs Sep’17
20% 17% 17%22%
32% 29%21%
7%
26%
28%23%
17%14%
32%
20%
20%
13%
28%
20%
22%
17%18%
9%
20%
20%
11%
23%
32%38%
49% 46%
27% 31%39%
69%
23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune
> 3 Yrs
2 to 3 Yrs
1 to 2 Yrs
≤ 1 Yr
Noida holds the highest share of unsold inventory aged above 3 years followed by Chennai & Gurugram
% of inventory Age of unsold inventory in top-9 cities (Sep’17)
Notes: * Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments and villas across the regions.
19Source: PropTiger DataLabs Sep’17
Kolkata and Ahmedabad have more than 70% of the unsold inventory in the <50 Lakhs segment followed by Pune
37%
6%12% 16%
3%
37%
23%11%
25%
34%
31%
39%21%
28%
35%
20%56%
41%
11%
29%
24%
17% 30%
15%
18%
19% 21%
6%
14%
11%
13%
18%
6%
9%
7% 6%12%
20%14%
33%
21%7%
30%
7% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
> Rs.1 Crore
Rs.75-100 Lakhs
Rs.50-75 Lakhs
Rs.25-50 Lakhs
< Rs.25 Lakhs
% of inventory Budget breakup of unsold inventory (Sep’17)
Notes: * Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments and villas across the regions.
20Source: PropTiger DataLabs Sep’17
32%
16% 26
%
6% 12%
11%
6% 9% 7%
68%
84% 74
%
94% 88
%
89%
94%
91%
93%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune
Unsold Inventory as on Sep’17 – Completed Vs Under-Construction
Completed Under Construction
Ahmedabad and Chennai have highest share of ready to move in units in unsold inventory
Notes: * Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments and villas across the regions.
% of inventory
21Source: PropTiger DataLabs Sep’17
4…………………Pricing:
Positive Changes
22Source: PropTiger DataLabs Sep’17
Gurugram witnessed highest price appreciation followed by Mumbai and Hyderabad
Weighted average^^ BSP (Rs./sq.ft.) of apartment units as at the end of quarter
City Q2 FY’17 Q2 FY’18 Price Change(Y-o-Y)
Ahmedabad 2,912 2,960 2%
Bengaluru 4,811 4,926 2%
Chennai 4,998 5,052 1%
Gurugram^ 5,525 6,024 9%
Hyderabad 3,991 4,132 4%
Kolkata 3,879 3,831 -1%
Mumbai** 8,349 8,672 4%
Noida* 3,987 3,896 -2%
Pune 4,891 4,952 1%
Notes: ^^ Price weighted on number of units supply in respective projects in a city.* Noida includes Greater Noida and Yamuna Expressway.** Mumbai includes Navi Mumbai and Thane.^ Gurugram includes Bhiwadi, Dharuhera and Sohna.Analysis includes apartments across the regions.
23Source: PropTiger DataLabs Sep’17
Gurugram witnessed a sudden jump in the prices with 13% increase Q-o-Q
100
107105
106105 106
101103
104 104105 106
107
108 108 108 109111
101102 103
105104
100 100 99
95
9897
9494
102103 103
106
108
111
114 115 114
117 118
99 99 99 9998 98 98
100 101102
102104
104
101103
107
100 99 99 9998 97
9795 95
95
93
101 100 100
98 97 97
101
90
95
100
105
110
115
120
Q2FY'15
Q3FY'15
Q4FY'15
Q1FY'16
Q2FY'16
Q3FY'16
Q4FY'16
Q1FY'17
Q2FY'17
Q3FY'17
Q4FY'17
Q1FY'18
Q2FY'18
Ahmedabad Bengaluru Chennai Gurugram Hyderabad Kolkata Mumbai Noida Pune
All cities except Chennai, Kolkata and Noida witnessed price appreciation during the
quarter in absolute terms
Inde
x va
lue
(Bas
e: Q
2 FY
’15=
100)
Weighted average price index of residential units in top-9* cities
Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.
Analysis includes apartments and villas across the regions.
24Source: PropTiger DataLabs Sep’17
Outlook for Q3 FY’18
• We expect sales and new launches will show a growth of 30 – 40% on year on year basis in Q3 FY’18 primarily because of lower base of Q3 FY’17 (demonetization period) as well as improvement in customer confidence
• States like Maharashtra where RERA has been effectively implemented will gain most with improving customer confidence
• Many states have not yet started resolving customer grievances under RERA act or have come up with an effective RERA website. Such delays will hold back revival of customer confidence in these states
• Effective rate of 12% of GST has been a dampener for the under-construction property buyer as developers have not been clear on input tax credit. Sector is expectantly looking forward to November GST council meeting to get some respite on the rate
• Inclusion of immovable property in GST will be another big reform which can create short term hurdle in industry. Though this will be discussed in November GST council meeting but getting it through will not be that easy