Indian Real Estate Market’s Q4, 2015 Analysis – Tripti Rai for 99acres.com

Bengaluru, February 17, 2016: Despite various efforts taken to bring real estate market of India on track, the year 2015 ended with a gloomy picture. The change in infrastructure, new metro routes, and new plans for a better layout in every city were some of the initiatives taken by the Central Government with a hope to increase the property investments and direct sale and purchase.

Various other steps were also taken with the hope to revive the Indian real estate sector. We also saw concepts like ‘smart cities’ and ‘house for all’ being conceived and implemented.

100 percent FDI in real estate, with a more liberal exit policy, the repo rate was lowered to make the NRI investment stand on the same ground as any national investment.

It was expected that these efforts and the plans formulated to make them a possibility were enough to change the outlook of India’s real estate market.

But the nation that looked into the last quarter of 2015 saw no change in terms of new launches, while the property market continued to downfall in terms of no prospective homebuyers.

Despite the various measures incorporated by the government to encourage property investments and to check the real estate scenario of India, India continues to stare into the downfall of the property market.

The price movement in all the metros seems to be stuck on what it was in the previous quarter, and the same holds true even in the nationwide supply movement, which is at an all-time low. While there was low or negative movement in the major seven cities in terms of capital value and supply, the rental value data seemed to be holding the real estate anchor.

Quarter-Quarter Price Index in Q4, 2015*

While all the major cities like Bangalore, Mumbai, Pune, Kolkata, and Chennai witnessed zero percent price appreciation in the last quarter of 2015, it was Hyderabad that showed a positive change with an increase in property prices in the last quarter.

On the supply side, all the seven major cities saw a decline. There was no movement in new launches in any of the prime cities. Influenced by the real estate downfall, buyers stayed away from putting their money and mind in new launches, leading to a negative supply picture.

Supporting the near to nothing change in price movements all over the country, there was a city wise decline too, clubbing every major city in a common trend of zero to a negative rate of sale and purchase.

Let us look at the city wise real estate trends, individually –

• Delhi/NCR

The stagnancy that surfaced the property market of Delhi/NCR in the July to September 2015 moved towards depression in the October to December quarter. The quarter-to-quarter price index that was on 0% in July to September quarter lowered to -1% in the last quarter.

However, civic enhancements and infrastructure development continued growing with the hope that the level of unsold inventory will lower eventually and the capital values might grow again.

• Mumbai

Mumbai’s real estate market was shoved under the weight of increasing construction cost, a mismatch in demand and supply and slow infrastructure growth. These factors led to a 0% quarter-to-quarter price index in October to December as opposed to the 1% in the last quarter, Q3.

• Bangalore

The city that was known to show a positive picture in terms of property irrespective of how India performed finally ended with -1% quarter-to-quarter price index, coming in line with other cities.

• Chennai

The few positives like AMRUT Funding and smart city projects were awash by the floods, keeping the city at 0% just like the previous quarter, Q3.

• Pune

What was once seeing a growth on the quarter-to-quarter price index front, crumbled under declining customer sentiments and falling sales volume. Pune stood at 0% price movement to what was a meager 1% in Q3.

• Kolkata

By understanding the needs of end users, Kolkata’s developers stayed away from hiking the prices of the new projects. While the move improved the home sales, the quarter-to-quarter price index tumbled down to 0% like a majority of its metropolitan counterparts.

• Hyderabad

Backed by political stability and improving the commercial sector, Hyderabad was the only city, out of all the prime ones, that grew by 1%.

Even when all the prime cities of India showed less to zero, and even negative, price movements, developers stayed hopeful that that the scenario would change in 2016 as the market is only going to rise after hitting rock bottom. With the present gloomy picture, that is what we leave for the coming quarters to decide

* http://www.99acres.com/articles/insite-report-pan-india-summary-oct-dec-2015

By Tripti Rai for 99acres.com

Corporate Comm India (CCI Newswire)