Kolkata - The de-growth in residential supply has been getting worse and sales of units were down by 7% in 2017, said a report.
"Despite the massive need for housing that India is facing, huge unsold inventories caused by a prolonged focus of the developers on the wrong apartment ticket sizes have brought the residential real estate industry to its knees," said the report - India Real Estate for the period July-December 2017, prepared by Knight Frank India.
It said while the "de-growth in residential supply has been getting progressively worse", that of demand has been relatively muted.
"Down 7% year-on-year, approximately 0.23 million units were sold during 2017 compared to a little over 0.1 million units launched," it added.
However, tumultuous events over the past 14 months that saw the government aggressively push a culture of transparency through measures such as demonetisation, Goods and Services Tax (GST) and the Real Estate (Regulation and Development) Act, 2017 (RERA) have irrevocably altered the course of the industry, it said.
On the Kolkata market, Samantak Das, Chief Economist & National Director - Research, Knight Frank India, said: "Even as impact of demonetisation tapers off pan-India, Kolkata's residential sector is reeling under the pressure of slowdown in real estate activities as developers focus on realignment of operations post the rollout of the Goods and Services Tax (GST) and weakening sales volume."
According to him, launches dwindled by a staggering 47% in 2017 and sales volumes in the end-user driven market witnessed a sluggish movement courtesy waning buyers' confidence post demonetisation and other structural reforms.
"The delay in the setting up of the Housing Industry Regulation Bill (HIRA) has further pushed buyers in the wait and watch mode," he added.