Cities That Need To Work Harder To Shake Off Slowdown
The fact that property in Mumbai is among the most expensive in the world mostly works against it. However, that did not stop the financial capital of India to bag the spot of being the star performer in the fourth quarter of the financial year 2016-17 (FY17) , data on home sales and new launches show. According to a quarterly analysis by PropTiger DataLabs, Mumbai contributed the highest to overall new launches in nine major cities during the quarter ending March. It was also the highest contributor to home sales during that period.
The nine cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurgaon (including Bhiwadi, Dharuhera and Sohna) , Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane) , Noida (including Greater Noida and Yamuna Expressway) and Pune.
“The Mumbai Metropolitan Region (MMR) has witnessed a surge in launches within the below Rs 25-lakh segment on account of favorable policy measures by the government. The region has contributed the highest, around 35 per cent, to the overall launches across top nine cities in the below-Rs 25 lakh segment,” says the PropTiger RataLabs report titled Realty Decoded. However, not all cities are witnessing similar trends in their property markets.
Odd-one-out: Kolkata sees no growth in sales
Kolkata was the only city that registered a quarter-on-quarter (QoQ) decline in sales during the quarter — overall, home sales increased 13 per cent during the quarter. Home sales in Q4 declined 13 per cent in the City of Joy when compared to the previous quarter of FY17. The performance of Pune property markets was not impressive either, as home sales increased only one per cent during the quarter. This is in contrast with the 89 per cent quarterly growth witnessed by Hyderabad and the 33 per cent appreciation witnessed in Chennai. Even Noida, a market considered the worst-hit from the over three-year slowdown that looms over property markets across India, saw home sales numbers increasing 23 per cent QoQ. Kolkata and Pune also saw new launches going down during 43 per cent and 52 per cent, respectively, during the period. Interestingly, property prices in both the cities saw an average decline of two per cent when compared to the fourth quarter of FY16.
Also read: Over 250 Luxury Homes Are Up For Grabs In Kolkata's Plush Localities
Not aging gracefully in Noida
While Noida's performance in terms of sales might be impressive, the information technology hub of the national capital region has another problem. Of the total inventory stockpiling in Noida, 67 per cent units are over three years old. This means developers might have to tweak their branding strategies and offer additional freebies to sell off the ageing stock. Similarly, 50 per cent of the inventory stock in Gurgaon is over three years old. A large share of inventory stock in Chennai (43 per cent) and Mumbai (40 per cent) are also units older than three years.
Also read: Top 5 Localities In Noida Where You Can Buy Your Dream Home
Ahmedabad, Gurgaon must contribute more
Data show that together with Hyderabad, Ahmedabad and Gurgaon witnessed the highest increase in new launches on a yearly basis. But both the cities must see an improvement in their sales numbers, too, to keep a healthy mix. According to the report, while individual sales and new launches saw an uptick in Gurgaon and Ahmedabad, both the cities contributed only three and six per cent, respectively, to total sales numbers. At eight per cent each, the contribution of Chennai and Noida is not impressive either.
Also read: These Micro-Markets Are Popular Among Homebuyers Looking For Luxury In Gurgaon
Is the rise in prices a good sign for Hyderabad?
Unlike other markets where prices have remained largely range-bound, rates of property in Hyderabad have increased about five per cent annual. In a slow-moving market this might not be a good sign. But, so far the city has retained a healthy mix of growth in sales and new launch numbers.
Also read: Over 500 Plots Up For Sale In Hyderabad