The Indian real estate market is bracing for a slight downturn in the third quarter, according to recent projections by PropEquity. The report indicates a 4% year-on-year decline in housing sales across India's top 9 cities, with the Mumbai region and Pune experiencing the most significant drops.

Key Highlights

• Overall housing sales expected to decrease from 105,081 units to 100,370 units
• Thane and Pune face the steepest declines at 28% and 16% respectively
• Bengaluru and Kolkata show promising growth, with 21% and 25% increases projected

Regional Breakdown

The PropEquity report provides a detailed city-wise analysis of the projected housing sales:

Market Dynamics

The projected decline is primarily attributed to lower demand in the Mumbai region and Pune. Thane is expected to witness the most significant drop, with sales falling by 28% to 14,877 units. Pune follows with a 16% decline to 17,762 units. Mumbai and Navi Mumbai are also anticipated to see decreases of 8% and 6%, respectively.

However, the picture is not uniformly gloomy across all major cities. Several metropolitan areas are projected to experience growth:

• Bengaluru leads with an expected 21% increase to 16,840 units
• Kolkata shows strong growth potential with a 25% rise to 4,732 units
• Chennai is projected to grow by 16% to 5,406 units
• Hyderabad and Delhi-NCR both anticipate modest 4% increases

Seasonal Factors

The report notes that the July-September period is typically considered a weak quarter for real estate sales. This is largely due to the monsoon season and the observance of Shraadh, a period considered inauspicious for new beginnings in Hindu tradition.

Supply Outlook

Despite the projected dip in sales, the supply of new residential properties is expected to remain stable. The report suggests that over 92,000 new units will be introduced to the market, indicating that developers remain optimistic about long-term demand.

This projected stability in new supply, coupled with varied regional performance, suggests a complex and nuanced real estate landscape across India's major urban centers. While some cities face challenges, others are showing resilience and even growth, pointing to the diverse nature of India's housing market.

As the real estate sector navigates through these regional variations and seasonal factors, stakeholders will be keenly watching how these projections play out in the coming months.

The Uttar Pradesh government has introduced sweeping changes to its building bylaws, potentially transforming the real estate landscape in the National Capital Region (NCR). The new regulations, which replace the 2008 bylaws, are expected to significantly increase housing supply and offer more options to homebuyers, while potentially challenging existing property investors.

Key Changes in Building Regulations

The revised bylaws bring several notable changes:

• Elimination of ground coverage limits
• Increased Floor Area Ratio (FAR)
• Relaxed norms for building heights
• Eased restrictions on setbacks, parking, and landscaping

These amendments apply across urban authorities in Uttar Pradesh, including Noida, Greater Noida, and the Yamuna Expressway Industrial Development Authority (YEIDA).

Impact on Developers and Housing Supply

The new regulations allow developers to construct taller and denser buildings on existing land parcels. This change is expected to substantially expand the housing stock in the NCR, particularly in areas under UP jurisdiction. Developers are likely to recalibrate their project strategies to capitalize on these changes while being cautious to avoid an inventory glut.

Implications for Homebuyers and Investors

Industry experts anticipate that homebuyers will be the primary beneficiaries of these changes. The increased supply is expected to result in:

• Wider range of housing options
• More competitive pricing
• Potentially improved affordability

However, the outlook for residential property investors is less optimistic. Analysts suggest that investors may face:

• Slower capital appreciation
• Increased difficulty in selling units
• Competition from newer projects when attempting to sell existing properties

Regional Variations and Market Dynamics

It's important to note that these new bylaws are specific to Uttar Pradesh. Neighboring areas like Gurugram in Haryana continue to operate under different building regulations. This disparity could lead to shifting market dynamics within the NCR.

The impact is expected to vary across different parts of the NCR:

• Noida and Greater Noida: Primarily end-user markets, likely to see increased benefits from the new regulations
• Gurugram: With a higher proportion of investors, may experience different market trends due to unchanged bylaws

Looking Ahead

As these changes take effect, the real estate sector in UP's portion of the NCR is poised for significant transformation. Homebuyers may find themselves with more choices and potentially better prices, while investors and developers will need to adapt to the new market realities. The long-term effects on urban development, property values, and the overall real estate market in the region will be closely watched by industry stakeholders and policymakers alike.