Knight Frank, a research agency in its recent report provided analysis of the half-yearly performance of India's Real Estate sector. The key element of growth was recorded in the number of new launches, which increased by 46% on a year-on-year (YoY) basis across India. Number of units sold also increased by 3% YoY. The period of stabilisation, right sizing and right pricing of new residential product and improving homebuyer sentiment due to increased transparency have resulted in the growth of these numbers, which are at their highest since demonetization.

Unsold inventory also decreased by 17% from the previous year, across India. Report states that developers, in cognizance of the weakening demand scenario and mounting unsold inventories, have been concentrating on freeing up capital locked in inventory at increasingly lower prices.

Mumbai witnessed a significant jump in new launches, at 35,974 units, recording a growth of 128% YoY. The temporary lifting of the construction ban in Brihanmumbai Municipal Corporation (BMC) region is being regarded as a major contributor to this increase.

The Bombay High Court had ordered a stay on construction of new buildings in the BMC region (Mumbai city) in March 2016 owing to the growing unscrupulous dumping hazard. The ban was imposed to address the oversaturation of the city's landfills due to construction debris. This verdict affected all new launches in the BMC region resulting in a significant slump in the overall launch numbers for Mumbai during the ensuing period. In March 2018, the country's Supreme Court lifted the ban for a period of 6 months, giving a breather to the developer community. Consequently, to maximise the benefit of this temporary relief, developers have been launching projects rampantly. This has resulted in a significant rise in the overall launches for Mumbai in Q2 2018 and in H1 2018 overall.

A strong momentum in launches can also be expected in H2 2018 and H1 2019 as a large number of developers are speeding up the process of taking approvals of new project launches and are preparing a launch pipeline for the next 6-12 months, stated the report.

Developers are now launching smaller size units to be able to bring down the ticket size. This way, houses become affordable for the populace and developers benefit from the increased number of transactions. The fall in ticket size also answers for a 9% YoY drop in home prices and a reduction of 14% YoY in unsold inventory for the first half of the year in Mumbai.

While sales have gone up compared to last year, the growth is negligible at 1% YoY. A major contributor to this marginal growth in sales is the increased number of new launches, especially in the affordable housing segment. Additionally, government incentives under PMAY, subvention schemes and flexi-payment options have made home-buying attractive for lower ticket size projects.