Lack of new launches in Q2FY25 will dampen growth of major real estate developers

New Delhi [India], October 8 : India's real estate sector is expected to witness sequential moderation in the second quarter of FY25, driven primarily by lack of big launches from major real estate companies, according to a report by Motilal Oswal.
The subdued activity in new launches is likely to result in a slowdown in sales momentum, despite steady traction in ongoing projects. The report said "Expect sequential moderation due to lack of launches"
The report also highlighted that prominent real estate developers, including DLF, Oberoi Realty (OBER), and Sobha Ltd., did not introduce key new projects during the quarter.
The muted launch pipeline has dampened the growth potential for Q2 FY25, causing these companies to rely on existing inventory to drive performance.
DLF did not launch any major projects in the second quarter. As a result, its performance for Q2 FY25 is expected to be driven entirely by its inventory of ongoing projects.
The report anticipates that DLF will generate bookings worth Rs 20 billion during the quarter, reflecting a 10 per cent decline compared to the same period last year.
"We expect DLF to clock bookings of Rs 20b, down 10 per cent YoY" said the report.
Another real estate leader, Oberoi Realty also did not announced new launches in Q2 FY25, but it continued to experience steady traction across its ongoing projects. As per the report, the company is expected to record a 17 per cent year-on-year decline in bookings, amounting to Rs 8 billion.
Sobha Ltd too refrained from launching any key projects during the quarter but has a considerable inventory of unsold stock, worth approximately Rs 100 billion, across its ongoing developments.
The company is expected to report pre-sales of Rs 18 billion for Q2 FY25, which is flat compared to the same period last year. While Sobha's unsold stock provides a buffer for the company, the lack of new launches has limited its growth potential for the quarter.
This pause in new developments may indicate a strategic decision by developers to focus on liquidating existing inventories in the face of evolving market dynamics. As these companies prioritize clearing unsold stock, the pace of new launches could pick up in the coming quarters as the festive season begins.