Lack of clarity over RERA pulls down Hyderabad residential launches in H1 2017

Hyderabad: Lack of clarity over implementation of the Real Estate (Regulation & Development) Authority ( RERA) Act in Telangana has led to a 55% decline in residential project launches in the first half of 2016, points out global property consultant Knight Frank.

While the launches in H1 2016 were nearly 5,000, it fell to 2,500 in H1 2017. However, as sales remained steady, slowdown in launches helped lower the unsold inventory.

According to Samson Arthur, director, Knight Frank, Hyderabad, “Apart from the effects of demonetisation, lack of clarity on the implementation of RERA dampened new launches as the developers are adopting a wait and watch mode. Conversely, confidence of home buyers increased during the period as developers rushed into completing projects ahead of RERA coming into force. This led to a marginal increase in sales during the first half of 2017.”

The report added that even the booming affordable housing segment didn’t witness many launches as majority of it were concentrated towards the western corridor housing the IT employees.

Interestingly, while the Hyderabad office market saw a decline in H1 2017 after witnessing its highest yearly office space transaction in 2016, the city also witnessed the higher number of office space deals ever.

The city witnessed transaction of 2.3 million sft in H1 2017 which is approximately 15% lower than H1 2016 and 26% fall when compared with H2 2016, the report said.

“Shrinking new completions have not kept pace with the demand for quality supply thereby pushing the overall vacancy level to around 9% and 2-3% in some micro markets like Madhapur, Hitech City, Gachibowli and Nanakramguda,” Mr Arthur added.