Gurgaon, August, 04, 2016
– Q2, 2016 witnessed the residential sector on the cusp of recovery, as the top six cities in India noted the launch of about 24,000 new residential units
, taking the H1 2016 total to approximately 42,000 units. In Q2 2016, Bengaluru
witnessed the maximum number of launches and accounted for about 48%
of the total units, followed by Pune 21%
and Mumbai 16%.
Gurgaon and NOIDA remained subdued in terms of new launches as developers remained focused in their efforts to address the existing inventory overhang.
“The residential market has started witnessing green shoots of recovery, however, currently most of the demand is skewed towards completed projects. In the coming quarters, we expect transaction volume to increase especially during festive season though, the track record of developers and right price points shall continue to play the key role in determining the demand for new projects. Capital values are unlikely to change in most of the micro markets, but ticket size may come down in expensive markets as developers are focusing on launching projects with smaller configuration with easy payment plans”, says Surabhi Arora, Senior Associate Director Research at Colliers International India.
Bengaluru witnessed a spurt in new project launches having almost doubled from Q1 2016 at nearly 11,500 units at the end of Q2. Steady end-user demand coupled with strong office market fundamentals which are crucial to development of new residential clusters remained the primary catalyst behind the high volume of new launches in this quarter. A high proportion, 62%, of new launches in this quarter was in the peripheral areas of existing commercial hubs in the city. In terms of location, Devanahalli (26%), Budigere Cross (14%) and extensions of Kanakpura Road (12%) comprised a significant share of total new launches.
The Chennai residential market showed recovery, but at a steady pace, as new unit launches remained steady over the previous quarter and stood at about 2,100 units. This is primarily because of increased confidence amongst property developers owing to a stable state government retaining power following the Tamil Nadu Assembly Elections 2016. In keeping with end-users‘ need for affordability, developers steered clear of launching projects aimed at high-end and luxury segments and focused on the mid-segment (78%) and affordable (21%) categories at competitive base selling prices to boost sales velocity
The Mumbai residential market is moving towards a slow recovery, despite a relaxed quarter. During Q2 2016, new unit launches amounted to 3,800, raising the total so far this year to 10,300. The decrease in the number of launches is primarily due to the fact that Q1 witnessed unit launches in bulk by a few big developers and comparatively, there were not many bulk unit launched in this quarter. Western suburbs such as Goregaon, Andheri, Malad witnessed 37% of new launches, followed by Central suburbs (Chembur, Ghatkopar, Vikhroli) with 22%, Navi Mumbai with 21%, Thane with 17% and Central Mumbai (Dadar, Chinchpokli) with 3%.
Pune’s residential property market witnessed a QoQ increase in new launches, with 5000 units launched, taking the total to 7200 in H1. This indicates that the number of new units launched almost doubled in Q2. However, these unit were launched in only a select micro markets where a few developers have launched huge residential projects on large land parcels. Most of these catering to luxury or high end segment.The micro market in east Pune, Mundhwa had the highest number of unit launches with a 46% share, all in the mid segment. It was followed by Wakad and Baner with 24%, Undri with 12%, Balewadi and Bavdhan with 7%, Pimpri with 6% and lastly Kalyani Nagar with 5%. Launches in north and west Pune were mostly in the mid-end segment.
Gurgaon’s residential market continued to see subdued transaction volume. Most of the developers have exercised caution in their launch strategies, as the markets have registered a build-up of inventory due to lower sales volume from last nine quarters. In total, 1,580 units were launched this quarter in the mid-luxury segment. In NOIDA, during Q2 2016, almost 6,000 units were issued completion certificates, most of them located in Sectors 45, 74, 75, 76 and in sectors along NOIDA Expressway. Amidst heightened concerns over the delay in possession and to allay the fear of home buyers, the authorities of Noida, Greater Noida and Yamuna Expressway have decided to hire an external agency for floor wise monitoring of residential and commercial realty projects so that the developer is left with no leeway in deviating from the sanctioned plans
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