24,000 residential units launched during Apr-Jun: Study

[ecis2016.org] The residential segment could be on the cusp of a recovery, with as many as 24,000 residential units being launched in the top six metros during April-June of this fiscal, with Bengaluru witnessing the maximum number of launches, says a study

According to a report by Colliers International India, Q2 2016 witnessed the residential sector on the cusp of a recovery, as the top six cities – Bengaluru, Pune, Mumbai, Gurgaon, Noida and Chennai – saw the launch of about 24,000 new residential units, taking the H1 2016 total to around 42,000 units.

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Bengaluru accounted for about 48% of the total units, followed by Pune at 21% and Mumbai at 16%. Gurgaon and Noida remained subdued in terms of new launches, as developers focused on addressing the existing inventory overhang.

“The residential market has started witnessing green shoots of recovery. However, most of the demand is skewed towards completed projects. In the coming quarters, we expect the transaction volume to increase, especially during the festive season. The track record of developers and right price points, shall continue to play a key role in determining the demand for new projects,” Colliers International India’s senior associate director – research, Surabhi Arora said.

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According to the report, Bengaluru witnessed a spurt in new project launches, having almost doubled from Q1 2016 at nearly 11,500 units, at the end of the April-June quarter.

Steady end-user demand, coupled with strong office market fundamentals, which are crucial to the development of new residential clusters, remained the primary catalyst behind the high volume of new launches in this quarter, it noted.

The Chennai residential market showed recovery but at a steady pace, as new launches remained steady over the previous quarter and stood at about 2,100 units.

This is primarily because of increased confidence amongst property developers, owing to a stable state government following the Tamil Nadu assembly elections.

The Mumbai residential market is moving towards a slow recovery, despite a relaxed quarter as launches amounted to 3,800, raising the total so far this year to 10,300.

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“The decrease in number of launches, is primarily due to the fact that the January-March quarter witnessed unit launches in bulk by a few big developers and comparatively, there were not many bulk units launched in this quarter,” the report said.

Pune’s residential property market witnessed new launches of 5,000 units, taking the total to 7,200 in H1. However, these units were launched in select micro- markets where a few developers launched huge residential projects on large land parcels, with most of these catering to the luxury or high-end segments.

Gurgaon’s residential market continued to see subdued transaction volume. In total, 1,580 units were launched this quarter, in the mid-luxury segment.

In Noida, almost 6,000 units were issued completion certificates, amidst heightened concerns over delays in possession and to allay the fears of home buyers.

Arora further said that “Capital values are unlikely to change in most of the micro-markets but ticket size may come down in expensive markets, as developers focus on launching projects with smaller configurations and easy payment plans.”

Source: https://ecis2016.org/.
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