Residential sector saw an upward trend; sales grew by 5% in December month.

The residential property market in the nation is starting to look up. India’s Top 35 real estate markets, including Tier I and Tier II, saw 3 per cent annual growth, as well as 5 per cent sequential growth in sales in the quarter ended December.

Of these, 27 cities recorded an upward trend in sales at the end of December, and new launches, a symbol of builders’ confidence in continuing to market their projects rose 38 per cent over a year earlier.

Both counts maintained the dominance of affordable housing through government incentives, which have made housing projects not only enticing but also increased the confidence of the buyer. In the December quarter over 58% of the total sales of apartments valued less than Rs 50 lakh. According to Liases Foras Real Estate Ratings & Research, this market group saw 66 per cent new launches.

“There had been a small drop in sales and launch during the year 2018-19. The downward trend now has been reversed and the trajectory is showing an upward trend,” said Liases Foras Real Estate Ratings & Research Managing Director Pankaj Kapoor. “The time adjustment has strengthened the affordability of home buyers and builders have gained trust to undertake further projects with increasing demand rates.”

In addition to government incentives, the rates for residential loans have also dropped. The repo rate has decreased by 135 basis points in the last year by Reserve Bank of India. The biggest lender of the country State Bank of India (SBI) reduced its external benchmark rate by 25 basis points in December. The updated effective benchmark loan rate of 7.8% was introduced from 1 January 2020 and interest rates for new home buyers is starting from 7.9%.

As the response from homebuyers improved, the project launches have been increasing. For instance, real estate developer Sunteck Realty in Mumbai’s Goregaon suburb sold 125 apartments worth over Rs 200 crore in December. Recently in Naigaon, near Mumbai, the company launched another project. Piramal Realty also announced on Monday that in its Thane project it is selling over 300 apartments worth Rs 200 crore that starts with Rs 57 lakh.