During the December quarter, the price of new launches was 24% lower than that of existing supply, indicating possible signs of a correction, says a report by Liases Foras
The residential market across India witnessed less offtakes or sales during the third quarter to end-December compared with new additions or new launches by developers resulting in swelling up of inventory says a research report.
Liases Foras Real Estate Rating & Research Pvt Ltd, in its third quarter review of the residential market, says the price of new launches was 24% lower than that of the existing supply, indicating signs of correction and increase in affordable housing.
“This (December) quarter has seen the highest number of new launches since 2009, with Q4 2009-10 being the only exception. The composition of mid-segment (Rs25 lakh to Rs50 lakh) launches in the National Capital Region (NCR) and Pune stood at 43% and 41%, respectively. Chennai recorded maximum number of new launches in the luxury segment (Rs50 lakh to Rs1 crore) at 36%, followed by Hyderabad and Pune at 32% each,” the real estate rating and research agency said.
It said, the Q3 FY12-13 has witnessed subdued sales across cities with an exception of Hyderabad, which has recorded a 14% sequential growth in sales in terms of area. The Hyderabad market has come out of the muted sentiment witnessed over the past few quarters and gained traction.
According to Liases Foras, the weighted average price has been on rise across the six major cities. Bengaluru has logged in a 10% Q-o-Q price appreciation followed by a 6% sequential rise in Chennai. However, the price level in the Mumbai Metropolitan Region (MMR) dropped 1% on a quarterly basis indicating the long due correction in sight. The correction though small in magnitude, is likely to be welcomed by buyers, it said.
Inventory overhang situation persists in NCR and MMR, the report said adding that the unsold stock in MMR indicated equitable distribution across all cost brackets above Rs25 lakh. NCR recorded maximum unsold stock in the cost bracket of Rs25 lakh to Rs50 lakh. Only 7% of the unsold stock in MMR pertains to the products below Rs25 lakh, it said.
In terms of months inventory, only MMR and Hyderabad have maintained the level, while NCR and Chennai has seen a drastic rise with inventory standing at 38 and 36 months, respectively. The rise in months inventory in these two cities can also be attributed to the maximum number of new supply in the region, the agency said.