Time to zero in on your dream house? Launch prices slip in 2015
Launch prices for mid-segment new residential projects have seen
a 4-20 percent drop in 2015 in certain micro markets of Mumbai, National
Capital Region and Bengaluru, according to Cushman and Wakefield.
One man's meat is another man's
poison, so goes the saying. And a quite apt one for the real estate sector. So
while news flow from the residential property market remains mixed, prospective
buyers seem to have more to cheer than developers for now.
Launch prices for mid-segment new
residential projects have seen a 4-20 percent drop in 2015 in certain micro markets
of Mumbai, National Capital Region and Bengaluru, according to Cushman and
Wakefield.
According to the report, the
steepest decline was seen in Mumbai, with launch prices in pockets like
Goregaon and Thane falling 20 percent and 18 percent respectively.
In order to push sales, developers
are now bringing down the ticket size of their offerings by either reducing
unit sizes or by reducing capital values or both.
But it has not been all bad news for
developers in Mumbai.
After a long spell of subdued sales,
major Mumbai-based real estate companies had a comparatively better festive
season.
According to a report by Kotak
Institutional Equities, five developers sold over Rs 10 billion worth area each
in the December quarter. Oberoi Realty led the pack, followed by Godrej Properties
with both companies selling
projects at premium pricing.
According to Kotak, Mahindra
Lifescapes too will enter the much touted Rs 10 billion club through its
project in Andheri (E), the project size being smaller than projects launched
by peers.
Among unlisted companies, Lodha has
sold over Rs 1200 crore of area across projects and Radius Group over Rs 1300 crore
of area in two projects in Santacruz (W) and Bandra (E).
Experts say the September quarter
too saw an improvement in sales. According to a JM Financial report, quoting
data by Liases Foras, sales across eight major cities in India improved by
17 percent, from 57.8 million square feet in Q2 2014-15 to 67.9 million square
feet in Q2 2015-16.
"Improvement in sales on low
base is clearly a positive development with signal to bottoming out of
operational underperformance," says Abhishek Anand, CFA, JM Financial.
"However the break-up still
remains skewed towards lower ticket size units implying limited pick up in MMR.
We expect time correction in prices and improvement in purchasing power over
1-2 years to drive demand recovery in the sector," Anand says.
With lesser launches and a slowly
but surely reviving demand in Indian realty, is the time right now to go and
buy a house?
Happy Investing
Source:Moneycontrol.com
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