Residential Real Estate Report Q3
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Transcript of Residential Real Estate Report Q3
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7/29/2019 Residential Real Estate Report Q3
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RESIDENTIAL REAL ESTATEMARKET REPORT
Mumbai Metropolitan Region (MMR)National Capital Region (NCR) Pune Bengaluru
Hyderabad Chennai
Q3 FY 12-13
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About Liases Foras
Founded in 1998, Liases Foras is a non-brokerage real estate research firm that offers data and advisory
services. Our works on industry and scientific prognosis of the local market is highly regarded. Clientele
includes leading mortgage companies such as HDFC Ltd, Axis, among others, real estate funds,
developers, government bodies and leading international research organisations.
Data Services:
Providing quarterly updated data on real estate projects across twenty two cities in
India as shown in above map.
Quarterly market reports and presentations
Advisory Services:
Best use analysis - Project Monitoring
Risk Analysis - Project Rating
Valuation and Pricing
For more information visit: www.liasesforas.com or e-mail us at: [email protected]
Services Offered
Cities covered by Liases Foras.
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Festive season failed to boost the residential realty sector
The third quarter of FY2012-13 saw the residential realty sector slipping into lull once again. The market
did not seem to be enamored by the festive spirit and the astounding performance of the second quarter
proved to be just a flash in the pan.
Weakness in India's macroeconomic scenario continued as the Index of Industrial Production (IIP)
growth for November fell to a four month low and current account deficit as a percentage of GDP stood at
an unsustainable level of 5.4% for Q2 FY 2012-2013. The residential real estate market also mirrored the
negative sentiment and witnessed a lackluster performance in Q3 FY 2012-13. The old demons of surging
prices, ballooning inventory levels and subdued demand returned to haunt the sector in the third
quarter.
The table below provides a snapshot of the performance across the six major cities for Q3 FY 2012-
13:
Particulars Bengaluru Chennai Hyderabad MMR NCR Pune
Inventory (MnSqft)Q3 71.09 66.31 42.50 144.72 283 56.4
Q2 65.28 55.31 37.46 136.02 268.46 55.96
Sales (MnSqft)Q3 12.16 5.06 4.61 10.3 20.49 9.2
Q2 15.59 6.62 4.06 9.75 25.94 11.31
Value of Stock Sold (Rs Cr)Q3 5,011 2,259 1,506 9,224 8,413 3,936 Q2
6,342 2,687
1,390
8,346
11,167
4,282
WtAvg Price per sqft
Q3
4,705
4,548
3,444
11,295
4,339
4,549
Q2
4,274 4,301
3,320
11,385
4,123
4,411
Sales Velocity (%)Q3
2.62%
1.38%
1.53%
1.35%
1.40%
2.37%
Q2
3.23%
2.08%
1.24%
1.37%
1.71%
3.44%
Months InventoryQ3
15
36
23
39
36
14
Q2
10 22 25 39 28 12
Source:Liases Foras
Hyderabad crawls out of the slump
Though, the performance was subdued across the nation, it is quite evident that Hyderabad market
gained traction and came out of the muted sentiment witnessed over the past few quarters. It is the only
city to have shown a growth in sales over the quarter leading to inventory of 23 months, down from the
level recorded in the previous quarter. The meltdown of the Telangana issue coupled with the brisk paceof progress of the Hyderabad Metro Rail phase-I, boosted the market.
Ready properties featured high on the buyers' preference list in this
quarter, especially in Hyderabad. 35% of the total supply in
Hyderabad was ready to move in properties. Investors seeking
immediate returns and end users seeking faster possession have
shown inclination towards the completed properties. Pune and
MMR followed the suit with 19% and 14% of the total supply being
dominated by ready properties.Source:Liases Foras
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Highest number of new launches this quarter.
This quarter has seen the highest number of new launches since 2009, with Q4 FY 2009-10 being the only
exception. It is noteworthy that the price of new launches was 24% lower than that of existing supply,
paving way for affordable housing to turn into a reality in the near future.
In terms of cost bracket, it can be observed that most of the new supply is skewed towards products in
the budget segment (Rs 25 lacs -Rs 50 lacs) and mid-segment (Rs 50 lacs -Rs1 crore). 50% of the new
supply for the quarter was contributed by the affordable and budget segment.
0
1000
2000
3000
4000
5000
6000
7000
0
20
40
60
80
100
120
Rs.Persqft
InventoryinMillionsqft
Pune NCR
MMR Hyderabad
Chennai Bangalore
All India Price - New Supply All India Price - Existing Supply
Source:Liases Foras
National Capital Region
In keeping with the previous trend, most of the new supply for the quarter has been recorded in the NCR.
Greater Noida, Noida, Raj Nagar Extension in Ghaziabad, Bhiwadi and Gurgaon were inundated with new
project launches. Noida Extension has witnessed 6,148 units of new launches, the highest in the city, on
account of change in the Development Plan and increase in FSI. The increase in FSI serves as a payoff for
the compensation (63% cash and 10% land) given to the farmers during the Noida Land Row. Moreover,
with developers unable to obtain loans, it is also an incentive to boost sales. Habitation has started in Raj
Nagar Extension (Ghaziabad), and the location has seen a launch of 4,149 units in the affordable
segment. New supply in Gurgaon is mostly in the premium segment. Developers in Gurgaon continue to
face water scarcity and have to arrange tankers for construction work, thus escalating the cost of
construction.
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Mumbai Metropolitan Region
Navi Mumbai and Panvel ruled the roost in terms of new launches in MMR, followed by Extended
Central suburbs. As Island City and Western Suburb have reached saturation, the peripheral regions
have come to the rescue and eased the pressure of growing population. In Island City new supply of
542 units were recorded in this quarter which is in Sewri West from two projects by Lodha Group and
Ruparel Realty. Ulwe in Navi Mumbai, could be seen as attracting investors and its prices have surged
9% in last four quarters. Moreover, the proximity to proposed Reliance SEZ and Trans Harbour Link
accentuates the appeal of the location. SaiSahil by Paradise Group, White Castle by Lakhani Builder
and Yash Heights by Yash Developers are some of the new launches in Ulwe. Similarly, Panvel, with its
proximity to Pune and JNPT (the Jawaharlal Nehru Port Trust), coupled with strong rail connectivity
has gained much prominence. Balaji Vijay Sapphire by Emkayen Group, Govind Greenfields by Priyal
Group, Greenscapes by Monarch Universal are the major launches in Panvel.
Bannerghatta Road, Sarjapur Road, Whitefield, Yelahanka and Hennur Road have contributed 75% of the
new supply in the city. The IT stretch of Whitefield, Sarjapur Road and Marathalli have been preferred
launch locations of the developers.
Hinjewadi and Wagholi have logged in maximum number of launches for this quarter, which was mostly
in the budget segment. The festive fever continued with pre-EMI schemes and waiver on stamp duty
offered in a move to boost sales. Wagholi saw 627 units of new launches on the back of major
development activities. The plan for a 25 km elevated bridge has been laid to connect the Nagar Roadjunction with Shikrapur. DP Road located between Nagar Road and Wagholi is an emerging destination in
the Pune realty market. Matrix Meadows by Matrix Infra, Pristine City by Pristine Properties, Post
Lakeside by Agarwal Ventures and Crystal Rock by Swati Constructions are the main projects in Wagholi.
Koregaon Park, Erandwane, Kharadi and Baner witnessed quite a few launches in the luxury end.
A good number of premium launches were registered in Chennai this quarter. Abov, termed as the tallest
building in Chennai, by Akshaya Builders in Kelambakkam, Green`s Lotus by Greens Valleys Shelters in T.
Nagar, Elliots by Shree Nivas Housing in Besant Nagar and Green Edge by XS Real in Royapettah were the
major launches in this segment. About 57% of the new launches were garnered by Sholinganallur, Avadi
and Kelambakkam.
Bengaluru
Pune
Chennai
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Prices continue to edge higher
The price of existing supply remains at an elevated level across most of the six major cities on an annual
as well as sequential basis. This had a cascading effect on the demand and inventory piles. Sales in terms
of volume and value slipped in most of the cities due to which time required to clear the stock at theexisting absorption pace showed a significant rise.
NCR witnessed an uptrend in prices with Faridabad and North Delhi showing 23% and 21% sequential
gain. However, the pace of price increase slowed in Q3 2012-13 as against the previous quarter.
Bengaluru saw a whopping 10% surge in prices on account of mushrooming IT companies and availability
of superior range of products. Moreover, execution of projects at a faster pace has also impacted the
upward movement of prices.
Apparently, MMR is inching towards normalcy as prices have moved southward after three long
quarters. Even as the remaining suburbs recorded a 2%-3% quarterly price rise, it is likely that the long
due correction could see the light of the day, as the3% sequential price drop in the Island City could have
a rippling effect on the prices across other locations in the city. However, effects of a sudden rise in Ready
Reckoner rates in Mumbai, since 1 January 2013, cannot be completely ruled out.
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MMR
Location Q3 FY11-12 Q4 FY 11-12 Q1 FY 12-13 Q2 FY 12-13 Q3 FY 12-13
Lower Parel 27,649 28,446 27,011 26,596 26,833Goregaon (E) 12,578 12,598 14,218 13,707 14,700
Mulund West 8,670 8,686 9,394 9,638 9,932
Thane West 6,663 6,948 7,278 7,538 7,772
Mira Road East 5,001 5,120 5,411 5,607 5,785
Kalyan West 4,112 4,318 4,523 4,695 5,053
Panvel 4,023 4,067 4,288 4,502 4,590
NCR
Bhiwadi 2,007 2,100 2,413 2,464 2,637
Ghaziabad 2,423 2,621 2,867 3,053 3,173
Greater Noida 2,404 2,418 2,504 2,931 3,266
Gurgaon 5,681 6,239 6,762 7,220 7,511
Noida 3,577 3,834 4,023 4,277 4,931
Bengaluru
Sarjapur Road 3,163 3,183 4,119 3,936 4,262
Whitefield 4,584 4,499 5,215 4,559 4,467
Hebbal 4,836 4,874 4,856 5,787 7,644
MG Road 5,000 5,000 5,000 5,000 5,000
Kanakpura 3,089 3,097 3,179 3,164 3,581
Pune
Baner 4,862 5,077 5,205 5,403 6,099
Bavdhan 4,307 4,263 4,576 5,194 5,370
Kalyani Nagar 5,195 5,576 11,007 9,980 7,574
Talegaon 2,479 2,579 2,703 2,793 2,805
Wagholi 3,081 3,147 3,274 3,376 3,946
Hyderabad
Gachibowli 3,382 3,422 3,267 3,379 3,470
Chandanagar 2,623 2,693 2,699 2,800 2,988
Hitech City 2,700 2,700 2,750 2,750 3,060
Cyberabad 3,500 3,600 4,000 4,000 4,400
Madhapur 4,159 4,386 4,590 4,996 5,820
Chennai
Anna Nagar 5,368 5,478 6,042 7,005 7,551
Vellachery 5,264 5,109 5,654 5,599 5,886
Egmore 14,140 14,150 15,150 15,702 16,431
Adyar 11,239 11,239 11,239 10,704 14,901
Ambattur 3,914 4,026 4,195 4,869 4,858
Tambaram 3,284 3,322 3,292 3,334 3,336
Porur 3,619 5,345 4,925 5,194 5,553
Kanchipuram 2,302 2,751 2,702 2,701 2,699Source:Liases Foras
Location wise price trends across the cities
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Rare bit of good news on the sales front
Source:Liases Foras
21%
9%
6%
13%
35%
16%20%
8%
7%
17%
33%
15%Bengaluru
Chennai
Hyderabad
MMR
NCR
Pune
19%
8%
4%
24%
33%
12%
17%
7%
5%
30%
28%
13%
Bengaluru
Chennai
Hyderabad
MMR
NCR
Pune
Inner Circle: Q2 FY12-13 Outer Circle: Q3 FY12-13
Business turnover Unit sales
In terms of composition NCR, MMR and Bengaluru contribute more that 50% of the total sales in India's
residential realty sector. Although, the trend rolled over this quarter, the sales contribution saw a
marginal decline across most of the major six cities with an exception of MMR and Hyderabad. NCR,
Bengaluru and Chennai lost their respective chunks in the pie both in terms of volume as well as value. On
the flipside, MMR,in terms of volume, garnered a market share of 17% compared to 13% in the previous
quarter, whereas in terms of business turnover, the region contributed 30% of the sales as against 24%recorded in the September quarter. Treading on the same lines, Hyderabad witnessed an increase in
contribution in volume sales and business turnover.
Sales Velocity
Period Bengaluru Chennai Hyderabad MMR NCR Pune
Q3 FY2012 -13 2.62% 1.38% 1.53% 1.35% 1.40% 2.37%
Q2 FY2012 -13 3.23% 2.08% 1.24% 1.37% 1.71% 3.44%
Source:Liases Foras
The pace of off take also slowed across the cities. Chennai witnessed a significant decline in the salesvelocity to 1.38% in the Q3 from 2.08% in the previous quarter. In Q3 FY 2012-13, Bengaluru outdid Pune
to show the fastest pace of sale across the nation. Sales movement was slowest in MMR, while
Hyderabad saw slight acceleration in its velocity.
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National Capital Region
Mumbai Metropolitan Region
Bengaluru
Hyderabad
Pune
In the NCR region, Noida, Greater Noida and Ghaziabad region contribute about 70% of the total sales.
Maximum demand for the quarter was garnered by Raj Nagar Extension in Ghaziabad, Bhiwadi, Noida
Extension and Noida Sector 143. However, Bhiwadi saw a marginal decline as compared to the previous
quarter. In terms of cost bracket, demand was polarized towards the budget segment (Rs 25 lacs -Rs 50
lacs) and mid-segment (Rs 50 lacs-Rs1 crore).
In Mumbai, sales in terms of unit climbed 3% QoQ in December 2012 quarter. Extended Central Suburbs,
Navi Mumbai, Thane and Panvel contributed nearly 60% of the total sales in Mumbai, while sales
contribution of Island City, Central Suburbs and Western Suburbs has shown a steady decline over the past
few quarters. Thane, Ulwe and Panvel have emerged as the bright spots closely followed by Dombivali
(E), Virar (W) and Mira Road (E). Meanwhile, Airoli in Navi Mumbai and Ambernath (W) in Extended
Central Suburbs have shown a significant surge in sales volume in Q3 2012-2013, clearly indicating therise in appeal of the peripheral regions on grounds of increased infrastructure activities and better
connectivity.
In Bengaluru, major unit sales were registered in Kanakapura Road, Whitefield, Sarjapur Road and Hosur
Road on account of proliferating offices in the IT/ITES sector. Bannerghatta Road and Yelahanka also
witnessed a significant increase in sales. Budget segment (Rs 25 lacs -Rs 50 lacs) and mid-segment (Rs
50 lacs-Rs1 crore) were major contributors towards sales.
Hyderabad, the only market to have shown a sales growth, logged in maximum unit sales from
Gachibowli, Chandanagar, Kukatpally and Madhapur, the organised real estate corridor. The city has
shown remarkable improvement which can be credited to the improvement in construction activity.
Chakan, Hadapsar and Aundh contributed 65%of the total unit sales this quarter. However, when
compared to the previous quarter, most of the suburbs saw significant declines. Unit sales inKarve Road
and Aundh plunged 83% and 65%, respectively. Chakan, Pimpri-Chinchwad, Sahakar Nagar and
Yerawada are the only suburbs to have seen a growth in unit sales.
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Market sees spiral movement.
10
22
25
39
28
12
15
36
23
39
38
15
0 10 20 30 40 50
Bangaluru
Chennai
Hyderabad
MMR
NCR
Pune
Months inventory across the major cities in India
Q3
Q2
Source:Liases Foras
Efficiency has taken a hit across the cities and achieving a healthy level of 8 months of inventory seems to
be a far-fetched dream. In Chennai, months inventory shot up from 22 to 36 on account of slower pace of
offtake. Likewise, the significant rise in months inventory in NCR, Bengaluru and Pune can be attributable
to the decline in the sales velocity coupled with a good number of new supply in the region. However,
Hyderabad saw a decline in months inventory from 25 months to 23 months, MMR maintained its level at
39 months.
It is interesting to observe that the market is following a spiral movement where the efficient markets like
Pune and Bengaluru are slipping into the inefficient territory while perceived inefficient markets like
Hyderabad and MMR are moving into the efficient zone.
So far the positive momentum which followed the announcement of various reforms by the FDI in
September failed to buoy the Indian residential realty sector.
Even as affordable housing has drawn the long delayed attention, it remains to be seen whether the
implementation of the policies actually result in the creation of affordable housing. While, price still
remains at elevated levels, new properties being launched at lower price points are a welcome move and
generate prospects of moving towards efficiency in the long run.
The spotlight now lies on the fourth and final quarter of 2012-2013 which will help us to draw conclusion
on the overall performance of the Indian residential sector. Moreover, announcements made in the
Union Budget 2013-14 are also likely to have repercussions on the market and the prevailing sentiment.
Final quarter awaited with bated breath
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Glossary of Terms used:
Disclaimer
Inventory: Inventory is the unsold stock between two dates of survey. It covers all new launches (new
additions) as well as carried-forward inventory from the previous survey: Previous Unsold + New
Additions.
Weighted Average Price: This represents average price of the city/location against the unsold stock.
every projects unsold stock is multiplied with its price and summation of this product is divided by total
unsold stock to derive the weighted average price.
Sales Velocity: This signifies demand supply scenario in a market. It is the ratio between monthly sales
and total supply and gives an idea of gestation period of a project as per the existing dynamics. Ideally SV
shall be between 2.75% and 3%. The pace translates into gestation period of a maximum of 36 months of
a project.
Value of stock sold: represents stock the value of the trade or in other words business done during the
period. This is calculated by multiplying the sq. ft. sold during the period with prevailing prices.
Months Inventory: This represents the number of months required for the inventory in the market to be
absorbed according to the existing demand. It is calculated by dividing the closing stock (marketable
stock) by monthly sales.
FY-Fiscal year starting from 1st of April and ending on 31st March.
Q3- Quarter ending December
The information provided in this report is basd on the data collected by Liases Foras. Liases Foras hastaken due care in the collection of the data. However, Liases Foras does not warranty the correctness
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