Key residential property markets see signs of growth in July-Septemeber: Report

By: | Published: October 24, 2018 3:30 AM

Key residential markets across India showed some signs of improvement with all indicators witnessing a growth during the July-September quarter of 2018 versus the same period last year, said the latest findings of PropEquity.

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Key residential markets across India showed some signs of improvement with all indicators witnessing a growth during the July-September quarter of 2018 versus the same period last year, said the latest findings of PropEquity.

Housing demand across key cities increased 6% year-on-year largely on account of increase in number of end-users driven by more availability of ready inventory in the market, providing buyers with several risk-free options in attractive prices. With the marginal rise in absorption, the unsold stock declined by a moderate 8% y-o-y. New launches increased 12% to 32,870 units while it dropped a good 22% on a sequential basis in the nine cities combined.

However, the prices of unsold units showed no signs of abatement, albeit marginally. The average prices of unsold units increased 2% at Rs 7,928 per square feet. During the quarter ended September, cities with significant inventory overhang have seen no increase in prices as developers were compelled to reduce prices to clear off high inventory, said the report. The trend was most visible in Gurgaon and Noida, which have highest unsold inventory in India. In comparison, southern cities of Bengaluru and Hyderabad had comfortable inventory levels and hence did not witness a drop in prices, in fact registered a rise of 1% and 3%, respectively, on a y-o-y basis.

In Gurgaon, average price of newly-launched units saw no increase and stood at Rs 6,507 per square feet. The micro-market continues to be in deep distress with a significant contraction in both demand and supply due to high inventory.

Meanwhile, in Mumbai, contraction in supply of housing units continued, while demand witnessed a rebound. New launches in Q3 fell by a good 9%, owing to the high inventory overhang. However, absorptions witnessed a sharp 20% increase on a y-o-y basis, while the average prices remained unchanged at Rs 22,629 per square feet.

The present trend would come out as a good news after a long lull in the real estate sector. Last year, property prices in Mumbai and beyond were falling fast – almost 15-20% over the past 12 months or so – with builders looking to rid themselves of unsold inventory. Not only were discounts getting bigger, developers were also throwing in freebies hoping to convince buyers.

FE had reported on April 3, 2017 that an apartment in Chembur, Mumbai, comes with another one free in weekend getaway Alibaug. And that’s after the price of the Chembur flat had already been reduced by 15-20%.

Tata Housing had come up with a cash-back offer of up to Rs 10 lakh for projects in Kalyan, Bhandup, Mulund and Thane in the Mumbai Metropolitan Region(MMR) and in Dabolim, Goa. Prices started from Rs 70 lakh and went up all the way to Rs 4-5 crore.

Also, Kolte Patil Developers had announced buyers could book apartments at the launch price even for projects nearing completion. The Pune-based developer was willing to forego the premium over the life cycle of the project, which according to sector experts, was typically around 10-15% but could go up to even 30-40%. The offer was valid for homes in Mumbai, Bengaluru, Pune and Goa.

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