Top trends of India’s residential sector India’s residential sector is passing through interesting times. JLL India’s Real Estate Intelligence Service has identified the top ten trends of the Indian residential sector over the past two or three quarters: Supply Supply is showing variable signs of cyclical ups and downs depending on launches. Affordable and lower-priced residential corridors, such as Greater Noida and NH-8 (NCR-Delhi), Western Suburbs and Thane (Mumbai), Whitefield and Hosur Road (Bangalore) and Southern Suburbs (Chennai) were the prime drivers of new launches. Demand Demand is on the slowing curve in NCR-Delhi, but stable in all other cities, primarily on the back of new launches in emerging residential corridors being able to attract buyers. Of note is that while NCR-Delhi contributed over one-third of total new launches, its share of net absorption dropped from above 40 per cent to just over 36 per cent by 1Q14. Capital values The capital values have steadily risen across cities. Slowing sales momentum has tempered price growth in the Tier 1 cities. Select residential corridors have shown price increments due to new launches at higher prices and subsequent price increases in surrounding projects. Overall, on a pan-India basis, prices have risen by less than 2 per cent q-o-q for the past three quarters. The Tier II cities of Pune and Kolkata have shown the fastest growth due to lower floor prices, with similar reasons contributing to growth in Chennai. Buyer/investor sentiment These sentiments remains weak given the high interest rates and rising residential prices. Investors have become cautious and are investing in select projects, and by staying away, they have affected investor-driven, speculative residential markets. Buyers have become fence sitters, waiting for economic headwinds to improve and better credit conditions. Developer sentiment The sentiment of the developer is tied to the result of the country’s general elections. Developers have been taking a wait and watch stance, holding prices. They have shown more flexibility in offering discounts and are looking towards proactive policy changes. They are also targeting emerging corridors for low-ticket project launches.
Posted on: Fri, 23 May 2014 05:56:51 +0000
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