The year 2015 ended with some good news for the real estate investors in India. A report by property consultant Cushman & Wakefield showed a drop in launch prices of upto 20 per cent in new mid segment residential flats in metropolitan cities of NCR, Mumbai and Bangalore.The report has compared the launch prices of 2015 in the mentioned key micro markets with average weighted basic sale price over the last 2 years.
The report tracks the development activities in locations of Dwarka Expressway, New Gurgaon Southern Peripheral Road Sohna, Noida Expressway and Noida Extension in NCR; Thane, Goregaon and Malad in Greater Mumbai and South-West and Southern submarkets in Bangalore.
With a decline of 20 per cent in Average Weighted Basic Sale Price, suburban Goregaon in Mumbai registered the biggest decline, where the per square ft rate averaged at Rs 10,500 in 2015. Thane followed Goregaon and witnessed a dcline of 18 per cent in the launch price. Mumbai witnessed a 37 per cent decline in residential unit launches to 15,735 units, from the corresponding period last year with Mulund, Thane, Goregaon and Malad accounting for nearly 51 per cent of total launches during 2015. The new launches in 2015 have been smaller in configuration therefore with reduced base selling prices and smaller units, the ticket size (cost per apartment) has also seen a decline in these key markets. The submarket of Malad witnessed ticket size reduction by 15 per cent despite average launch prices (mid segment) declining by only 8 per cent primarily due to significantly reduced average unit sizes. Thane and Goregaon witnessed a decline in Average Weighted Basic Sale Price by 18 per cent – 20 per cent as well as reduced ticket size of new projects in 2015 compared to 2013.
Southern Peripheral Road in Gurgaon also saw a decline of 10 per cent in average base selling price of new launch projects compared to 2013. With declining number of new launches amidst a slump in buyer’s interest, Delhi-NCR witnessed new unit launches aggregating approximatley 23,000 units in 2015, of which 79 per cent of the units were launched in the locations of Dwarka Expressway, New Gurgaon Southern Peripheral Road Sohna, Noida Expressway and Noida Extension in NCR. Half of the total new launches in 2015 were in the mid segment at approximately 12,400 unit.
In a bid to attract buyers, developers have tried to bring down the ticket size of their offerings by either reducing unit sizes or reducing capital values or both. Such efforts from developers have been witnessed across submarkets especially in Southern Peripheral Road, New Gurgaon and Noida. Dwarka Expressway and Southern Peripheral Road saw the largest decline in launch prices in NCR of 10 per cent as against 2013 in Base Selling Price.
Most of the submarkets in Bengaluru witnessed steady launch prices except in Far South and Western submarkets where average new launch prices in 2015 declined by 2-7% compared to 2013.