This quarter, the state government has finally implemented the increased ready reckoner rates with effect from 1 April 2016
In the first quarter of 2016, the top six cities in a real estate survey witnessed an infusion of nearly 19,000 new residential units. Maximum number of launches were concentrated in Mumbai (34%), followed by Bengaluru (32%) and Pune (12%), according to Residential Property Research and Forecast Report, by real estate consultancy Colliers India. While developers across all major cities steered clear of inundating the primary residential segment with too many new products, recovering market confidence prompted them to lure buyers with cash discounts and freebies.
The first quarter of 2016 witnessed an increased traction in the primary residential sales market, especially in the projects where developers were offering flexi payment plans and competitive pricing. About 6,500 new residential units were launched in this quarter. Most projects were launched in the price range of 15,000-25,000 per sq. ft. A few mid-segment projects—7,500- 8,000 per sq. ft—were also launched in Thane.
Secondary residential market maintained a status quo. This quarter, the state government has finally implemented the increased ready reckoner rates with effect from 1 April 2016. The rates were increased moderately, by 7%. Also, the Municipal Corporation of Greater Mumbai (MCGM) revised the draft development plan, which recommended a hike in the floor space index (FSI) from the present 1.33 to 2, and in some cases to 5.
The city’s residential property market saw the launch of nearly 6,000 new residential units. This represents a quarterly increase of 26% over the previous quarter, even though developers are concentrating efforts on completing under-construction projects. Almost all units launched in this quarter catered to the mid-segment signalling developers’ focus on introducing affordable products. The quarter did not witness the launch of villa projects. Capital and rental values remained stable across micro markets.
Pune’s residential property market witnessed the launch of more than 2,200 new units during this quarter. All the new units launched catered primarily to the mid segment and were concentrated in eastern and western quadrants due to consistent demand from IT-ITeS workforce and the city’s manufacturing sector base. Capital values maintained status quo during this quarter, however, rental values in some micro markets. Even though high levels of unsold stock deterred developers from launching new products, high income levels and falling interest rates kept end-user demand in affordable segment steady.
Gurgaon’s residential market continued to maintain status quo in terms of demand. Sales in the primary market have remained weak from the last six consecutive quarters. The tepid response to soft launch projects resulted in minimal new project launch in the first quarter of 2016. In the secondary market, the demand was primarily driven by end users. Capital values remained stagnant in almost all the micro markets, however, project specific discounts were available.
Noida’s residential market remained stagnant with minimal new launches. The focus of the developers remained on completion of under-construction projects. In the last two quarters, the Noida Authority has issued completion certificates for more than 35 projects. For these projects, there was a massive drive to register the property by 31 March 2016 due to expected increase in stamp duty value.
The supply of new deliveries has put downward pressure on rental values. Primary sales market is expected to remain under pressure, but secondary sale volume may pick up marginally.
During the first quarter of 2016, Chennai’s residential property market witnessed a 9% dip in new launches over the previous quarter. Nearly 1,100 new units were launched during this period, out of which 10% were in soft launch stage. This dip is attributed to both low recovery in property markets in the aftermath of floods from a few months back, as well as delay in approvals owing to model code of conduct in the wake of state elections. Developers focused on completion of stalled projects amidst low sales velocity.
Of the total units launched, mid segment dominated the launches with an 84% share while the rest were concentrated between high-end and luxury segments.
Edited excerpts from Residential Property Research and Forecast Report, by Colliers India.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!