Trends in real estate in Indian Metros

Positive buzz continues amid realty
The real estate sector may not be in its ‘golden phase’ right now, but the buzz surrounding the market still remains. Industry bodies such as Ficci and Assocham say that a 10-15% fall in property prices has been witnessed over the last six months, with further corrections in the offing. In fact, a recent Ficci-E&Y report also observed that slowdown or not, a majority of developers see an upward growth curve for Indian real estate. The positive buzz continues despite the slowdown or high interest rate worries. Global real estate consultancy Jones Lang LaSalle Meghraj (JLLM) made some key findings on the top trends in prime property markets in metros for residential stock.

Delhi: Left A-loan
The increase in home loan rates has caused the residential market in Delhi to slow down to quite an extent, according JLLM. Many prospective buyers are deferring their purchases, though this is true only in the mid-income segment — the demand for high-end residences remains unaffected. A correction of around 10% has been seen in Delhi’s property market. Also, DDA’s initiative to develop 6,000 flats for the mid-income group has seen a tremendous response. The Greater Noida Development Authority has launched a similar initiative. This has made homes in the Rs 15 lakh range a possibility again. Says Kunal Banerji, president, marketing, Ansal API, “It’s a fact that the high-end segment has not been affected and the demand is still as strong. Even the mid-income segment is seeing good demand with the coming of schemes in the market. For instance, our EMI holiday scheme has been getting an encouraging response from the mid-segment.”

Mumbai:
Going Slow In the financial hub, the sales of residential properties has slowed down dramatically, especially in key areas from Santa Cruz up to Andheri, Goregaon and Kandivali. There has been a 40% dip in sales since the slowdown began and intending buyers are deferring their decisions until after November. However, it is a different scenario in the Bandra-Khar area, where the cash-cheque component in transactions has been far higher. The dip there has been to the tune of 25%. There have been no transactions in south Mumbai since the last four months, even though investor flats are now selling at cheaper rates than builder flats. In areas like Byculla and Prabhadevi, builders are asking for rates like Rs 44,500-45,000/ sq.ft while investors are asking for Rs 43,000-44,000/ sq.ft.

Bangalore:
Supply’s Drying Up JLLM finds out that in Bangalore, even though the residential market has slowed down, the true impact of the slowdown is yet to be seen. There is a wait-and-watch situation in many areas which include mostly Central Business District (CBD) locations. Rates in CBD areas such as MG Road, Lavelle Road and Richmond Road range between Rs 14,000 and Rs 16,000 per sq ft. However, in high-demand areas such as Koramangala, Indiranagar and Sadashivnagar, there is a dearth of supply being seen.

Amit Bagaria, chairman of Bangalore-based Asipac Projects, however, feels the slowdown has impacted the city. “Overall, there has been a dip of 20-25% in sales. Locations such as Whitefield, Sarjapur Road, Bannerghatta Road and JP Nagar are seeing this dip. There is a price correction in the resale market to the tune of 15-25%. However, there is hardly any correction in the primary supply coming from developers.”

Chennai:
No More Construction In Chennai, there is a new supply coming in but primarily in the upper income segment with prices between Rs 75 lakh and Rs 1 crore. No fresh constructions are happening in the mid-segment, since land rates have moved beyond developers’ affordability. The accent is now on larger properties of 1,000-2,000 sq.ft. and above, with supply in smaller properties considerably lower. Premium locations in the city such as Poes Garden, Boat Club Road and Aryapuram are still seeing strong demand. While prices in Poes Garden are in the range of Rs 18,000 and Rs 20,000/ sq ft, it varies between Rs 20,000-Rs 22,000/ sq ft in Boat Club Road. Speaking of lower-to-middle income group destinations, Moggapair, which is close to Anna Nagar is witnessing rates ranging from Rs 2,800-Rs 3,200/sq ft. There has been no fresh supply for the lower income groups in this and similar areas, with new projects catering mostly to the middle segment. However, the OMR area and Sriperumbudur will see low-income housing supply in the next few years.