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00:00Now, housing sales have dipped across nine major cities in the first quarter

00:04of this fiscal compared to the previous quarter. They have fallen by 18 percent. I'm now joined by

00:09Sameer Jasuja, founder and CEO of PropEquity, which has come out with this report. Hi, Sameer,

00:16thank you very much for joining us. Sameer, to begin with, what do you think is driving

00:23this dip in sales? Now, do you think the hike in property prices may have had a part to play,

00:28especially in a city like Mumbai and Hyderabad also, which has seen perhaps the sharpest decline?

00:37No, not really. I think there are other factors that have led for the new launches,

00:44having come down by 7 percent in absorption, having come down by 18 percent in the top tier

00:49one cities. The main reasons are that we had the highest ever sales in the previous quarter.

00:57The second reason is that quarter two is usually a slow quarter compared to all the other

01:04three quarters. And fourthly, that this was the election quarter. So, election does have an impact

01:10with respect to new launches and lower the new launches, lower the sales. So, if the decline

01:17has of new launches has been 7 percent, so that's played a role. The election quarters played a role

01:23and we are comparing ourselves to the previous quarter, which was the highest ever in the history

01:28of real estate sales, which is roughly about 130,000 units. Now, Hyderabad has come down because

01:34Hyderabad over the last 10 years has gone up from 20,000 units a year to 100,000 units of launches

01:42a year. It has been a historical high and 5x has been the growth, whereas in NCR, for example,

01:51we had launches of about 150,000 units a year in 2010 to 2012, and they've come down to

01:5825,000 units a year. So, you have to look at city by city wise. And when you look at city by city

02:04wise, there are certain cities which have done very well over the last three years. And there

02:08has to be a dip because you just can't keep on going higher and higher. Whereas if you look at

02:13NCR, the market has doubled because the supply has been so low. And when you look at the population,

02:19NCR is a population of 35 million compared to Hyderabad, which is a population of maybe 8

02:25million to 10 million. So, these are all the factors that have contributed to a city like

02:30Hyderabad's numbers going down, whereas NCR's numbers have gone up. I was going to come to that.

02:37NCR numbers actually up by 7%. What's the story there? And like I said, NCR over the last 10

02:45years, the supply in the market has gone down by 80%. So, we're just about recovering and catching

02:52up. And as I was mentioning to you that NCR has a population of 35 million and we are launching

02:5825 to 30,000 units a year in this region compared to other cities like Hyderabad, which is about

03:0590,000 units, Pune, which is about 100,000 units a year, Thane, which is also another 90 to 100,000

03:12units. And their population is one-fifth or one-third the size of NCR. The reason why NCR

03:18has been so low is because A, the developer consolidation has happened over the last five

03:24years and it's the highest. B, that execution delays and a lot of projects got stalled here.

03:30So, the investor confidence and the end-user confidence was much lower compared to other

03:35cities. And of course, because of that, the prices have appreciated the most over here.

03:40And even then, the absorption has been almost 100% higher compared to last year because there's

03:46just no supply. Right now, in the past three years, of course, we've seen a considerable

03:51growth in the housing market. Would you see these numbers that you have come in with as perhaps

03:59signs of some amount of fatigue or do you think that maybe it's too early to suggest that?

04:05You know, this is a very interesting question and nobody's really looked into this question

04:11in two aspects. You know, when we look at real estate markets doing really well,

04:17you know, you need to look at the supply having increased, how much is the supply increased

04:21and how much has been the price appreciation. So, just to share with you, the price appreciation in

04:27the top tier cities, tier one cities in the last three years has been almost 50 to 100%.

04:32So, the market which was 3 lakh crores has become 6 lakh crores. So, that's primarily due to price

04:39appreciation. If you look at the supply, you know, in 2010, we were supplying almost 380,000 units.

04:47That 380,000 units after 15 years has gone to 450,000 units, which is hardly an increase of

04:5515% over the last 10 to 15 years. So, when you look at supply, and when the market says that

05:00the real estate market has hit through the roof and it's really doing very well, it is,

05:05but comparatively to other industries, the new launches or the new units that have been added on

05:11are not as much as much as the role that has been played by price appreciation.

05:16All right. Thank you very much, Samir, for joining us and bringing to us

05:20that report and not just that, actually breaking it down for us as well. Samir, thank you.

What's Driving The Dip In Housing Sales? | NDTV Profit

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