Despite the steps announced by the government, mostly in the second half of the year, sales during July-December declined by 22 per cent compared to the first half.
"The unrelenting liquidity crisis, lower-than-expected buyer sentiments and faltering GDP growth eventually put brakes on the overall housing growth in the second half of 2019," said Anuj Puri, Chairman of Anarock Property Consultants.
Amit Wadhwani, MD of Mumbai-based consultancy firm SECCPL said "The year 2019 saw the relentless challenge for the real estate sector with severe liquidity crisis leading to a number of bankruptcies, regular reforms, amends by government and increased foreign investments in the market."
Among other liquidity infusing measures, in a much-awaited relief for distressed home buyers awaiting possession of their flats, the Finance Ministry last month committed up to Rs 10,000 crore for completing housing projects stuck for years.
Thereafter, the Union cabinet cleared a proposal to set up a 'Special Window' in the form of an Alternative Investment Fund (AIF) to provide priority debt financing for the completion of stalled housing projects that are in the affordable and middle-income housing sector.
The corpus size of the AIF would be scaled up to Rs 25,000 crore after SBI and LIC pump in funds. It would grow further in the coming days with the addition of sovereign wealth funds and pension funds, the government said.The fund, however, is a work in progress right now.
"The year 2019 turned out to be a rather challenging one. Despite various measures announced by the government as well as the RBI, the going was tough for the industry. The sluggish economic growth during the first two quarters of the current fiscal added to the misery of the sector," Manoj Gaur, MD Gaurs Group and industry body CREDAI Affordable Housing Committee Chairman.
Deepak Kapoor, Director, Gulshan Homz said that although multiple policy measures were announced, "something was left wanting and it is this gap that has be plugged in with the coming of the new year".
He hoped that 2020 would be much more fruitful in terms of funding for real estate and finance options for the buyers.
Further, in a major boost for the flow of liquidity, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has reduced its repo rates in over five consecutive bi-monthly meets this year, making a cummulative reduction of 135 basis points (bps).
However, the transmission of the RBI's rate cuts onward to retail loans has only been 44 bps, according to the apex bank.
In its previous MPC meeting earlier this month, the central bank kept its repo, or short term lending rate for commercial banks, unchanged at 5.15 per cent and said that it would like to wait for the impact of the previous successive rate cuts.
Amit Wadhwani, MD of Mumbai-based realty consultancy SECCPL said "The year 2019 saw the relentless challenge for the real estate sector with severe liquidity crisis leading to a number of bankruptcies, regular reforms and amends by government."
The year was also marked bythe home buyers' victories in major legal tussles with the builders. In a landmark judgement in the the Amrapali case, the Supreme Court in July directed the public sector enterprise NBCC (India) to take over the stallwed Amrapali projects and complete them. However, work on the projects is yet to gain momentum, while the Supreme Court earlier in the month directed SBICAP Ventures Ltd to decide on financing the uncompleted projects of the defunct Amrapali Group.
Besides, the resolution process for Jaypee Infratech, where over 20,000 home buyers are yet to get their flats after a delay of around a decade, has also neared completion. Earlier this month, NBCC's resolution plan got the majority votes from the firm's Committee of Creditors (CoC) and is set to acquire Jaypee Infratech and its stalled projects.
Next, the NBCC plan has to receive the approval of the the Allahabad-bench of National Company Law Tribunal (NCLT).
Dhruv Agarwala, Group CEO of Elara Technologies, said that along with the Rs 25,000 crore fund to salvage stalled projects, the progress made in resolutions for Jaypee and Amrapali group will go a long way in reviving sentiment in the market during 2020 and the coming years.
Although residential real estate remained subdued and tepid, commercial realty witnessed a positive run during the year.
According to a JLL report, India's office market has set a new benchmark and recorded a historic high, both in net absorption and new completions. While 4.65 million square feet of space got absorbed, nearly 52 million square feet of Grade-A office space was completed in 2019.
Along with the conventional commercial and office spaces segment, co-working, co-living spaces and student housing also gained in demand during the year.
Speaking on student housing, Anindya Dutta, MD and Co-founder Stanza Living said "The industry is beginning to garner investor attention. Also, rental yield improvement and professional asset management have created a growing interest from landlords, property owners, educational institutes and developers for partnership."
"We believe the student housing industry is still nascent and has the potential to grow at least '4x' over the next decade," he added.
On the outlook for 2020, market players are optimistic that the demand scenario would improve across segments and the government's measures would result in positive impact on the long-subdued sector.
"We hope the coming year is the last year of the storm that has engulfed residential realty," said Samir Jasuja, Founder and MD at PropEquity.