Residential realty ‘stabilising’ in Delhi NCR, Chennai, Kolkata

Residential realty ‘stabilising’ in Delhi NCR, Chennai, Kolkata
The Hindu Business Line, August 12, 2009, Page 1

Moumita Bakshi Chatterjee

After a virtual freefall triggered by the global meltdown, the prices in the residential markets in Delhi NCR, Chennai and Kolkata appear to have ‘stabilised’ in July.

The average capital values in these markets remained more or less unchanged in July compared to April, according to data compiled by Cushman & Wakefield.

The Pune market, however, bucked the overall trendand saw a price decline of 2-11 per cent. Interestingly, the Mumbai mid-range residential market actually saw a rise in capital values in suburban locations — Bandra (W), Khar, Santacruz (W), Andheri, Malad, Powai.

“We have seen a bit of an improvement across most markets, and prices have plateaued. The ready-to-move offerings are attracting end-users, but even the projects that are under construction are seeing end-user interest now. Although there is an improvement in demand, there is supply coming into the market and so the capital values are unlikely to spike in the short-term,” said Ms Shveta Jain, National Head, Marketing and Investment, Residential Services, Cushman & Wakefield India.

The capital values in the key locations in Chennai have stabilised over the past few months, mainly on the back of new projects with attractive price tags. However, high-end development in Boat Club and Poes Garden have seen capital values drop 5-6 per cent.

India’s financial hub, Mumbai, also showed some encouraging signs, as spike in demand lent stability to values. The demand has been particularly visible in the mid-range segment, especially suburban Mumbai.

This, in turn, has led to an increase in values for such locations.

The high-end property space continued to correct albeit marginally and the dip was not as pronounced as the previous quarters. Supply for new ready-to-move in apartments has been constrained due to slowdown in construction activities while there is an improvement in demand, said C&W.

There were no major price adjustments in Delhi NCR in mid and high end segment in July. The same was true for most parts of Kolkata.

Pune, on the other hand, registered fall in capital values both in the premium and mid-range housing. The drop in value for North East and East locations in both the categories stood at nearly six per cent (compared to April this year) as builders reset their expectations in line with buyers’ perception. In the mid-end segment, Wakad witnessed significant correction (about 11 per cent) owing to excess supply. Wanowrie including NIBM Road and Kondwa too have been hit by an oversupply situation and unrealistic prices.

Bangalore mid-range market showed minor correction in some parts (Central, South, North West) and stability in others (East, South East and North). The high-end housing market continued to see further correction – over 10 per cent was seen in the Off Central area (Frazer Town, Benson Town, Richards Town and Dollars Colony). Secondary market outperformed the primary housing market, with end-users willing to take advantage of reduced prices and lower interest rates.