Track2Realty: New residential unit launches across top eight cities declined by 12% y-o-y in 2014 with total launch of 153,000 units. The top three cities of Bengaluru (27%), NCR (17%) and Mumbai (16%) comprised of 60% of the total new launches in 2014, says a report by Cushman & Wakefield.
The number of new unit launches dropped substantially (46%) in Hyderabad as developers reconcile to the changing market dynamics post the bifurcation of the state.
|
Residential Units Launches |
|||
| City |
YTD 2013 |
YTD 2014 |
% Change |
|
(No. of Units) |
(No. of Units) |
||
| Ahmedabad |
6,300 |
4,800 |
-24% |
| Bengaluru |
49,300 |
40,900 |
-17% |
| Chennai |
13,900 |
17,600 |
27% |
| Delhi-NCR |
38,400 |
26,800 |
-30% |
| Hyderabad |
9,200 |
5,000 |
-46% |
| Kolkata |
7,800 |
17,300 |
122% |
| Mumbai |
30,800 |
25,000 |
-19% |
| Pune |
18,700 |
16,100 |
-14% |
| Total |
174,400 |
153,500 |
-12% |
Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield says “Despite the upliftment of economic sentiments post the election, the end user uptake of residential units has been restricted leaving a reasonable unsold inventory that developers would like to off load. In addition to that, the industry is expected to see some significant regulatory changes in the coming months with the first full – time budget being presented later in February, which may give a clearer indication on the regulatory and legislative framework for the future.”
Mid segment residential units continued to remain favorite amongst developers with a two-third share in total launches; also, unit launches in this segment increased by 5% from the previous year. Unit launches in the high-end segment dipped by 29% in a year; whilst in the affordable segment they declined by 38% from the previous year. Although luxury units contributed only 1% to total unit launches, they increased by five times from the previous year.
|
New Launches in Units |
|||
| SEGMENT |
2013 |
2014 |
% Change |
| Affordable |
42,900 |
26,400 |
-38% |
| Mid |
97,200 |
101,800 |
5% |
| High End |
34,100 |
24,300 |
-29% |
| Luxury |
200 |
1,000 |
400% |
| TOTAL |
174,400 |
153,500 |
-12% |
Sanjay Dutt further added, “The first half of 2015 will continue to remain subdued for the residential markets, at least until some more positive measures are introduced by the Government and regulatory authorities to boost the demand. These measures include interest rate cuts by the RBI, incentives in the Union Budget such as enhancements on rebate under Income Tax for home purchases, boost in savings, etc. Further, if the Government can also increase the supply for affordable housing through faster approvals, financial support and incentives, etc., we expect that the total number of unit launches will increase substantially as developers will increase their focus on the segment.”
Capital value trends at the end of 2014:
Pune saw the highest increase in capital values with most market registering an increase in capital values. Quoted capital values appreciated in the range of 2-14% from the previous year in majority of Pune’s submarkets. Pimpri, in Pune, recorded the highest y-o-y quoted capital value appreciation (across top eight cities) of 14% in the mid segment, as the physical infrastructure has improved significantly. Quoted capital values along NH4 Bypass (North) submarket comprising of locations such as Hinjewadi, Wakad, Mahalunge, Bavdhan, etc. also increased by 13% from the previous year due to a continued housing demand emanating from professionals working in the neighboring IT hubs. Aundh-Baner submarket in Pune registered the highest annual capital value appreciation (across top eight cities) of 11% in the high-end segment, primarily due to limited new supply and high demand from professionals employed in the nearby IT-ITeS companies.
Quoted capital values in the high-end segment of Chennai’s central submarket comprising of locations such as Boat Club and Poes Garden, also appreciated by 8% from the previous year primarily due to dearth of new supply amidst continued demand. Bengaluru, Hyderabad, Mumbai and Kolkata witnessed a mixed trend with capital values in many submarkets remaining sticky throughout the year.
Due to continued demand and because of improving infrastructure, quoted mid segment capital values appreciated by 3-7% in a few submarkets of Bengaluru. Quoted capital values in a few submarkets of Hyderabad and Mumbai appreciated by 2-9%, primarily due to unit launches at higher prices.
Quoted capital values in Ahmedabad and Chennai remained largely stable for majority of the submarkets from the previous year. Mid segment units in south submarket (Maninagar – Ahmedabad) appreciated by 5% y-o-y and GST (Grand Southern Trunk Road – Chennai) also improved by 10% in 2014.
Delhi-NCR was the only city that registered correction in its quoted capital values during the year. Apart from Noida, which witnessed an appreciation of 5-6% in both mid and high-end properties, quoted capital values corrected in the range of 2-11% due to high levels of unsold inventory in other submarkets within the NCR. South-east Delhi submarket comprising of locations such as New Friends Colony, Kalindi Colony, Ishwar Nagar, Kailash Colony, etc. registered highest y-o-y capital value correction of 11% in mid segment units. Luxury segment in Gurgaon recorded highest annual correction of 7%, across the top eight cities due to subdued demand for these high-priced units.
Delhi-NCR
In 2014, approximately 27,000 units were launched in Delhi-NCR, a 30% decline from the previous year. Due to subdued demand and significant unsold inventory, developers launched fewer projects in 2014. In 2014, majority of the projects were launched in the suburban and peripheral locations and were targeted at affordable and mid segments, which have witnessed continued demand. 61% of new unit launches were in Noida in submarkets such as Central Noida Extension, Yamuna Expressway and Noida Extension.
Gurgaon witnessed launches primarily in the affordable segment along Sohna Road and mid segment along the SPR (Southern Peripheral Road) and in New Gurgaon. Mid segment had the highest share (69%) in total units launched during the year, followed by affordable segment (22%). Developers offered heavy discounts as well as various payment schemes/plans were given to woo buyers and garner sales.
However, the overall transaction activity remained subdued during the year. Delhi government’s decision to hike circle rates further hampered the buyer sentiments. Apart from Noida, which witnessed an appreciation of 5-6% in both mid and high-end properties in the third quarter of 2014 (primarily due to significant progress in approvals on the extension of metro line from Noida City Centre), quoted capital values corrected in the range of 2-11% due to high levels of unsold inventory in other submarkets within Delhi-NCR.
