Is NCR Losing Out To Mumbai, Bengaluru, Pune?

The Capital gion (NCR) has long been topping the charts in sales of residential units. However, according to the recently released report on the second quarter (Q2) of the financial year 2015-16, Realty Decoder-Q2'FY16, released by the Data Labs division of PropTiger.com, 60 per cent of the number of units sold in Q2'FY16 were in Mumbai, Bengaluru and Pune. PropGuide analyses whether NCR is losing out to Mumbai, Bengaluru, Pune and what could be the reasons?

In almost every city, prices have marginally risen. But, in Gurgaon, at the end of Q2, prices had not changed when compared to Q2'FY15. In , prices fell by 1.8 per cent. In Bhiwadi too, prices fell by 0.1 per cent. In all the other top cities analysed by Data Labs, there was a moderate rise in prices. This indicates that there has been a greater fall in demand in many parts of the NCR when compared to other top cities. In , Bengaluru, and Pune, prices went up by 4 per cent, 4.8 per cent, and 1 per cent, respectively.

However, there was a rise in prices in Sohna, Yamuna Expressway and Greater , by 6.2 per cent, 5.7 per cent and 2.8 per cent, respectively. So, from Q2'FY15 to Q2'FY16, prices have not fallen in all micro markets in the NCR.

In the past 10 quarters, the lowest price appreciation was in Noida and Gurgaon. In the past 10 quarters, in both Noida and Gurgaon, the weighted average price index declined from the base value of 100 to 98 while in Bengaluru, this number went up from 100 to 112, and in Mumbai and Pune, it went up from 100 to 106. This implies that in the past 10 quarters, price appreciation in Bengaluru, Mumbai, and Pune have been much higher than in Noida and Gurgaon.

From Q2'FY15 to Q2'FY16, the number of units launched declined in every top city barring Hyderabad. al estate developers in NCR responded to the declining demand by lowering the supply of apartment units. Mumbai, Bengaluru, and Noida have the highest unsold inventory. The unsold inventory in these cities is nearly 60 per cent of the total unsold stock. In , unsold inventory is lower.

A very interesting fact the report highlights is that in Q2'FY16, ready-to-move-in inventory is very low in all parts of NCR. In , Gurgaon, Bhiwadi, and Sohna, unsold inventory is 1.9 per cent, 1.3 per cent, 0.9 per cent and 0.0 per cent, respectively. But in Mumbai, Navi and Thane, it is 4 per cent, 4.4 per cent and 3.6 per cent, respectively. In Bengaluru and Pune, it is 6.8 per cent and 5.1 per cent, respectively.

However, inventory overhang is the highest in Noida and Gurgaon, at 59 and 54 months, respectively. In , it is 43 months, and in Bengaluru and Pune, it is 31 and 24 months, respectively. In , unsold inventory that is older than three years is the greatest, at 33 per cent. In , too, it is high at 22 per cent. In Bengaluru and Pune, it is 9 and 11 per cent respectively. However, inventory older than three years is high in Mumbai, Navi and Thane too, at 28 per cent, 19 per cent and 17 per cent, respectively.

Noida also has the highest unsold inventory in the affordable category. But, unsold inventory in affordable category is high in Mumbai, Pune, and Bengaluru too. Much of the unsold property in Gurgaon and Mumbai is in the luxury segment, while this is not true of Noida, Bengaluru, Thane, Sohna or Pune.