Mumbai: Consumer activism had a sobering effect on the residential real estate sector, which saw a drop of 34 per cent in the number of residential units launched in 2016.
The total of new launches was 89,000 across six major cities compared to 2015, indicating the waning interest of buyers in the primary market.
Ms Manju Yagnik, vice-chairperson of the Nahar Group, said the certainty of implementation of the Real Estate (Regulation and Development) Act (RERA) and consumer activism in the form of various protests over timely completion of projects, have pushed developers to focus on completion of existing projects.
Institutional investors, she said maintained a strong interest over 2016, in financing of Grade A residential projects under-construction, helping developers to complete their existing projects.
“We expect a similar trend, at least in the first half of 2017,” she said.
Large organised real estate companies having better access to institutional funding and lead to consolidation in the sector would favour growth of this sector, she said.
“A single window system for time-bound approvals is imperative for the success of any such structural changes in the system and for the sector’s long-term survival and growth. This is where the 60 day approval system needs to be established with an auctioning at the earliest,” Ms Yagnik suggested.
Bengaluru led in the number of new constructions at 28 per cent followed by Mumbai 25 per cent, Pune 23 per cent, the National Capital Region (NCR) 15 per cent and Chennai for nine per cent.
