Magicbricks’ PropIndex for Jan-March 2017, the most awaited real estate quarterly report that covers price movement across 750 major localities spread over 14 key cities, revealed that while the overall realty market scenario remains weak, as a direct impact of demonetization, there is little evidence of any major price correction in the secondary or resale market, as predicted earlier.
The flagship report of Magicbricks, India’s No.1 property site, for the immediate quarter of demonetization suggests that despite cash-ban the much expected landslide price depreciation of 5-20% did not materialize for the lack of transaction volumes in the market and stickiness to price from the seller side.
Ready-to-Move (RM) properties continue to command a premium over Under-Construction (UC) properties. Although, the price of RM properties has seen a comparative decline and the difference of price between RM and UC properties now stand at 5.5% as against 9% a year ago. At the same time, price of UC properties has seen a marginal increment, net result being closing of gap between price of RM and UC properties.
The report also states that the majority of supply and consumer preference in the Indian residential market is in the Rs 3,000-6,000 per sq.ft budget segment as this price bracket governs the overall momentum of residential segment. Given the fact that price in segment is likely to remain stagnant, the current market scenario is likely to persist for at least over next 3-6 months. More than 50% of 750+ localities across 14 cities fall within this price range.
Mr. Sudhir Pai, CEO Magicbricks says, “The latest PropIndex reveals that the South Indian cities of Bengaluru, Hyderabad and Chennai have witnessed price gain of 1.5% while prices in the National Capital Region (NCR) fell by 1% during the quarter. Among NCR cities, Delhi has undergone a maximum price decline across all segments, around 22% which is the highest in the country for 3.5 years. As the real estate sector goes through a transitional phase with the introduction of RERA, GST, Benami Act and REITs, a tool like PropIndex becomes a key indicator that will help consumers get a fair idea about the changing times.”
According to the latest PropIndex, major suburban and core city localities in mid to higher budget segments have done relatively well in terms of quarterly price gain as compared to peripheral areas, especially in Chennai and Pune. Most of the peripheral areas which account for bulk of development activity have seen a price decline. Especially in case of south India, this decline in prices has been due to decline in price of Under-Construction (UC) properties.
Both Bengaluru and Chennai witnessed price gain while the end of a political unrest has brought back the much needed stability for the real estate industry in Hyderabad resulting in a 2-4% price gain. About 65% of 94 major localities in Bengaluru witnessed price gain in Jan-Mar 2017 quarter, which shows that the city continues to witness improvement in price level for sixth consecutive quarter. Major core Chennai localities like Adyar, Nungambakkam and T Nagar saw price increment along with major suburban areas like Velachery, Perungudi, Nanganallur and Thoraipakkam.
In the west, Mumbai, except for the top- budget bracket of Rs 35,000+ per sq.ft, has witnessed a price decline in most of the localities. But in Pune peripheral localities on average saw a price decline but areas close to industrial clusters like Moshi, Chakan and Talegaon Dabhade have seen price increment.
The NCR cuts a sorry figure as Delhi’s realty market continues its downward movement, the worst in the country. Gurgaon follows in the footsteps of New Delhi due to problems of unsold inventory, project delays and stagnant prices. In Noida, localities which have projects which have ready-to-move (RM) options or are nearing completion have seem marginal price as compared to those with mainly under-construction properties.