Residential Real Estate Report Q3

7/29/2019 Residential Real Estate Report Q3

1/12

RESIDENTIAL REAL ESTATEMARKET REPORT

Mumbai Metropolitan Region (MMR)National Capital Region (NCR) Pune Bengaluru

Hyderabad Chennai

Q3 FY 12-13


2/12

About Liases Foras

Founded in 1998, Liases Foras is a non-brokerage real estate research firm that offers data and advisory

services. Our works on industry and scientific prognosis of the local market is highly regarded. Clientele

includes leading mortgage companies such as HDFC Ltd, Axis, among others, real estate funds,

developers, government bodies and leading international research organisations.

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Providing quarterly updated data on real estate projects across twenty two cities in

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Best use analysis - Project Monitoring

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Cities covered by Liases Foras.


3/12

Festive season failed to boost the residential realty sector

The third quarter of FY2012-13 saw the residential realty sector slipping into lull once again. The market

did not seem to be enamored by the festive spirit and the astounding performance of the second quarter

proved to be just a flash in the pan.

Weakness in India's macroeconomic scenario continued as the Index of Industrial Production (IIP)

growth for November fell to a four month low and current account deficit as a percentage of GDP stood at

an unsustainable level of 5.4% for Q2 FY 2012-2013. The residential real estate market also mirrored the

negative sentiment and witnessed a lackluster performance in Q3 FY 2012-13. The old demons of surging

prices, ballooning inventory levels and subdued demand returned to haunt the sector in the third

quarter.

The table below provides a snapshot of the performance across the six major cities for Q3 FY 2012-

13:

Particulars Bengaluru Chennai Hyderabad MMR NCR Pune

Inventory (MnSqft)Q3 71.09 66.31 42.50 144.72 283 56.4

Q2 65.28 55.31 37.46 136.02 268.46 55.96

Sales (MnSqft)Q3 12.16 5.06 4.61 10.3 20.49 9.2

Q2 15.59 6.62 4.06 9.75 25.94 11.31

Value of Stock Sold (Rs Cr)Q3 5,011 2,259 1,506 9,224 8,413 3,936 Q2

6,342 2,687

1,390

8,346

11,167

4,282

WtAvg Price per sqft

Q3

4,705

4,548

3,444

11,295

4,339

4,549

Q2

4,274 4,301

3,320

11,385

4,123

4,411

Sales Velocity (%)Q3

2.62%

1.38%

1.53%

1.35%

1.40%

2.37%

Q2

3.23%

2.08%

1.24%

1.37%

1.71%

3.44%

Months InventoryQ3

15

36

23

39

36

14

Q2

10 22 25 39 28 12

Source:Liases Foras

Hyderabad crawls out of the slump

Though, the performance was subdued across the nation, it is quite evident that Hyderabad market

gained traction and came out of the muted sentiment witnessed over the past few quarters. It is the only

city to have shown a growth in sales over the quarter leading to inventory of 23 months, down from the

level recorded in the previous quarter. The meltdown of the Telangana issue coupled with the brisk paceof progress of the Hyderabad Metro Rail phase-I, boosted the market.

Ready properties featured high on the buyers' preference list in this

quarter, especially in Hyderabad. 35% of the total supply in

Hyderabad was ready to move in properties. Investors seeking

immediate returns and end users seeking faster possession have

shown inclination towards the completed properties. Pune and

MMR followed the suit with 19% and 14% of the total supply being

dominated by ready properties.Source:Liases Foras


4/12

Highest number of new launches this quarter.

This quarter has seen the highest number of new launches since 2009, with Q4 FY 2009-10 being the only

exception. It is noteworthy that the price of new launches was 24% lower than that of existing supply,

paving way for affordable housing to turn into a reality in the near future.

In terms of cost bracket, it can be observed that most of the new supply is skewed towards products in

the budget segment (Rs 25 lacs -Rs 50 lacs) and mid-segment (Rs 50 lacs -Rs1 crore). 50% of the new

supply for the quarter was contributed by the affordable and budget segment.

0

1000

2000

3000

4000

5000

6000

7000

0

20

40

60

80

100

120

Rs.Persqft

InventoryinMillionsqft

Pune NCR

MMR Hyderabad

Chennai Bangalore

All India Price - New Supply All India Price - Existing Supply

Source:Liases Foras

National Capital Region

In keeping with the previous trend, most of the new supply for the quarter has been recorded in the NCR.

Greater Noida, Noida, Raj Nagar Extension in Ghaziabad, Bhiwadi and Gurgaon were inundated with new

project launches. Noida Extension has witnessed 6,148 units of new launches, the highest in the city, on

account of change in the Development Plan and increase in FSI. The increase in FSI serves as a payoff for

the compensation (63% cash and 10% land) given to the farmers during the Noida Land Row. Moreover,

with developers unable to obtain loans, it is also an incentive to boost sales. Habitation has started in Raj

Nagar Extension (Ghaziabad), and the location has seen a launch of 4,149 units in the affordable

segment. New supply in Gurgaon is mostly in the premium segment. Developers in Gurgaon continue to

face water scarcity and have to arrange tankers for construction work, thus escalating the cost of

construction.


5/12

Mumbai Metropolitan Region

Navi Mumbai and Panvel ruled the roost in terms of new launches in MMR, followed by Extended

Central suburbs. As Island City and Western Suburb have reached saturation, the peripheral regions

have come to the rescue and eased the pressure of growing population. In Island City new supply of

542 units were recorded in this quarter which is in Sewri West from two projects by Lodha Group and

Ruparel Realty. Ulwe in Navi Mumbai, could be seen as attracting investors and its prices have surged

9% in last four quarters. Moreover, the proximity to proposed Reliance SEZ and Trans Harbour Link

accentuates the appeal of the location. SaiSahil by Paradise Group, White Castle by Lakhani Builder

and Yash Heights by Yash Developers are some of the new launches in Ulwe. Similarly, Panvel, with its

proximity to Pune and JNPT (the Jawaharlal Nehru Port Trust), coupled with strong rail connectivity

has gained much prominence. Balaji Vijay Sapphire by Emkayen Group, Govind Greenfields by Priyal

Group, Greenscapes by Monarch Universal are the major launches in Panvel.

Bannerghatta Road, Sarjapur Road, Whitefield, Yelahanka and Hennur Road have contributed 75% of the

new supply in the city. The IT stretch of Whitefield, Sarjapur Road and Marathalli have been preferred

launch locations of the developers.

Hinjewadi and Wagholi have logged in maximum number of launches for this quarter, which was mostly

in the budget segment. The festive fever continued with pre-EMI schemes and waiver on stamp duty

offered in a move to boost sales. Wagholi saw 627 units of new launches on the back of major

development activities. The plan for a 25 km elevated bridge has been laid to connect the Nagar Roadjunction with Shikrapur. DP Road located between Nagar Road and Wagholi is an emerging destination in

the Pune realty market. Matrix Meadows by Matrix Infra, Pristine City by Pristine Properties, Post

Lakeside by Agarwal Ventures and Crystal Rock by Swati Constructions are the main projects in Wagholi.

Koregaon Park, Erandwane, Kharadi and Baner witnessed quite a few launches in the luxury end.

A good number of premium launches were registered in Chennai this quarter. Abov, termed as the tallest

building in Chennai, by Akshaya Builders in Kelambakkam, Green`s Lotus by Greens Valleys Shelters in T.

Nagar, Elliots by Shree Nivas Housing in Besant Nagar and Green Edge by XS Real in Royapettah were the

major launches in this segment. About 57% of the new launches were garnered by Sholinganallur, Avadi

and Kelambakkam.

Bengaluru

Pune

Chennai


6/12

Prices continue to edge higher

The price of existing supply remains at an elevated level across most of the six major cities on an annual

as well as sequential basis. This had a cascading effect on the demand and inventory piles. Sales in terms

of volume and value slipped in most of the cities due to which time required to clear the stock at theexisting absorption pace showed a significant rise.

NCR witnessed an uptrend in prices with Faridabad and North Delhi showing 23% and 21% sequential

gain. However, the pace of price increase slowed in Q3 2012-13 as against the previous quarter.

Bengaluru saw a whopping 10% surge in prices on account of mushrooming IT companies and availability

of superior range of products. Moreover, execution of projects at a faster pace has also impacted the

upward movement of prices.

Apparently, MMR is inching towards normalcy as prices have moved southward after three long

quarters. Even as the remaining suburbs recorded a 2%-3% quarterly price rise, it is likely that the long

due correction could see the light of the day, as the3% sequential price drop in the Island City could have

a rippling effect on the prices across other locations in the city. However, effects of a sudden rise in Ready

Reckoner rates in Mumbai, since 1 January 2013, cannot be completely ruled out.


7/12

MMR

Location Q3 FY11-12 Q4 FY 11-12 Q1 FY 12-13 Q2 FY 12-13 Q3 FY 12-13

Lower Parel 27,649 28,446 27,011 26,596 26,833Goregaon (E) 12,578 12,598 14,218 13,707 14,700

Mulund West 8,670 8,686 9,394 9,638 9,932

Thane West 6,663 6,948 7,278 7,538 7,772

Mira Road East 5,001 5,120 5,411 5,607 5,785

Kalyan West 4,112 4,318 4,523 4,695 5,053

Panvel 4,023 4,067 4,288 4,502 4,590

NCR

Bhiwadi 2,007 2,100 2,413 2,464 2,637

Ghaziabad 2,423 2,621 2,867 3,053 3,173

Greater Noida 2,404 2,418 2,504 2,931 3,266

Gurgaon 5,681 6,239 6,762 7,220 7,511

Noida 3,577 3,834 4,023 4,277 4,931

Bengaluru

Sarjapur Road 3,163 3,183 4,119 3,936 4,262

Whitefield 4,584 4,499 5,215 4,559 4,467

Hebbal 4,836 4,874 4,856 5,787 7,644

MG Road 5,000 5,000 5,000 5,000 5,000

Kanakpura 3,089 3,097 3,179 3,164 3,581

Pune

Baner 4,862 5,077 5,205 5,403 6,099

Bavdhan 4,307 4,263 4,576 5,194 5,370

Kalyani Nagar 5,195 5,576 11,007 9,980 7,574

Talegaon 2,479 2,579 2,703 2,793 2,805

Wagholi 3,081 3,147 3,274 3,376 3,946

Hyderabad

Gachibowli 3,382 3,422 3,267 3,379 3,470

Chandanagar 2,623 2,693 2,699 2,800 2,988

Hitech City 2,700 2,700 2,750 2,750 3,060

Cyberabad 3,500 3,600 4,000 4,000 4,400

Madhapur 4,159 4,386 4,590 4,996 5,820

Chennai

Anna Nagar 5,368 5,478 6,042 7,005 7,551

Vellachery 5,264 5,109 5,654 5,599 5,886

Egmore 14,140 14,150 15,150 15,702 16,431

Adyar 11,239 11,239 11,239 10,704 14,901

Ambattur 3,914 4,026 4,195 4,869 4,858

Tambaram 3,284 3,322 3,292 3,334 3,336

Porur 3,619 5,345 4,925 5,194 5,553

Kanchipuram 2,302 2,751 2,702 2,701 2,699Source:Liases Foras

Location wise price trends across the cities


8/12

Rare bit of good news on the sales front

Source:Liases Foras

21%

9%

6%

13%

35%

16%20%

8%

7%

17%

33%

15%Bengaluru

Chennai

Hyderabad

MMR

NCR

Pune

19%

8%

4%

24%

33%

12%

17%

7%

5%

30%

28%

13%

Bengaluru

Chennai

Hyderabad

MMR

NCR

Pune

Inner Circle: Q2 FY12-13 Outer Circle: Q3 FY12-13

Business turnover Unit sales

In terms of composition NCR, MMR and Bengaluru contribute more that 50% of the total sales in India's

residential realty sector. Although, the trend rolled over this quarter, the sales contribution saw a

marginal decline across most of the major six cities with an exception of MMR and Hyderabad. NCR,

Bengaluru and Chennai lost their respective chunks in the pie both in terms of volume as well as value. On

the flipside, MMR,in terms of volume, garnered a market share of 17% compared to 13% in the previous

quarter, whereas in terms of business turnover, the region contributed 30% of the sales as against 24%recorded in the September quarter. Treading on the same lines, Hyderabad witnessed an increase in

contribution in volume sales and business turnover.

Sales Velocity

Period Bengaluru Chennai Hyderabad MMR NCR Pune

Q3 FY2012 -13 2.62% 1.38% 1.53% 1.35% 1.40% 2.37%

Q2 FY2012 -13 3.23% 2.08% 1.24% 1.37% 1.71% 3.44%

Source:Liases Foras

The pace of off take also slowed across the cities. Chennai witnessed a significant decline in the salesvelocity to 1.38% in the Q3 from 2.08% in the previous quarter. In Q3 FY 2012-13, Bengaluru outdid Pune

to show the fastest pace of sale across the nation. Sales movement was slowest in MMR, while

Hyderabad saw slight acceleration in its velocity.


9/12

National Capital Region

Mumbai Metropolitan Region

Bengaluru

Hyderabad

Pune

In the NCR region, Noida, Greater Noida and Ghaziabad region contribute about 70% of the total sales.

Maximum demand for the quarter was garnered by Raj Nagar Extension in Ghaziabad, Bhiwadi, Noida

Extension and Noida Sector 143. However, Bhiwadi saw a marginal decline as compared to the previous

quarter. In terms of cost bracket, demand was polarized towards the budget segment (Rs 25 lacs -Rs 50

lacs) and mid-segment (Rs 50 lacs-Rs1 crore).

In Mumbai, sales in terms of unit climbed 3% QoQ in December 2012 quarter. Extended Central Suburbs,

Navi Mumbai, Thane and Panvel contributed nearly 60% of the total sales in Mumbai, while sales

contribution of Island City, Central Suburbs and Western Suburbs has shown a steady decline over the past

few quarters. Thane, Ulwe and Panvel have emerged as the bright spots closely followed by Dombivali

(E), Virar (W) and Mira Road (E). Meanwhile, Airoli in Navi Mumbai and Ambernath (W) in Extended

Central Suburbs have shown a significant surge in sales volume in Q3 2012-2013, clearly indicating therise in appeal of the peripheral regions on grounds of increased infrastructure activities and better

connectivity.

In Bengaluru, major unit sales were registered in Kanakapura Road, Whitefield, Sarjapur Road and Hosur

Road on account of proliferating offices in the IT/ITES sector. Bannerghatta Road and Yelahanka also

witnessed a significant increase in sales. Budget segment (Rs 25 lacs -Rs 50 lacs) and mid-segment (Rs

50 lacs-Rs1 crore) were major contributors towards sales.

Hyderabad, the only market to have shown a sales growth, logged in maximum unit sales from

Gachibowli, Chandanagar, Kukatpally and Madhapur, the organised real estate corridor. The city has

shown remarkable improvement which can be credited to the improvement in construction activity.

Chakan, Hadapsar and Aundh contributed 65%of the total unit sales this quarter. However, when

compared to the previous quarter, most of the suburbs saw significant declines. Unit sales inKarve Road

and Aundh plunged 83% and 65%, respectively. Chakan, Pimpri-Chinchwad, Sahakar Nagar and

Yerawada are the only suburbs to have seen a growth in unit sales.


10/12

Market sees spiral movement.

10

22

25

39

28

12

15

36

23

39

38

15

0 10 20 30 40 50

Bangaluru

Chennai

Hyderabad

MMR

NCR

Pune

Months inventory across the major cities in India

Q3

Q2

Source:Liases Foras

Efficiency has taken a hit across the cities and achieving a healthy level of 8 months of inventory seems to

be a far-fetched dream. In Chennai, months inventory shot up from 22 to 36 on account of slower pace of

offtake. Likewise, the significant rise in months inventory in NCR, Bengaluru and Pune can be attributable

to the decline in the sales velocity coupled with a good number of new supply in the region. However,

Hyderabad saw a decline in months inventory from 25 months to 23 months, MMR maintained its level at

39 months.

It is interesting to observe that the market is following a spiral movement where the efficient markets like

Pune and Bengaluru are slipping into the inefficient territory while perceived inefficient markets like

Hyderabad and MMR are moving into the efficient zone.

So far the positive momentum which followed the announcement of various reforms by the FDI in

September failed to buoy the Indian residential realty sector.

Even as affordable housing has drawn the long delayed attention, it remains to be seen whether the

implementation of the policies actually result in the creation of affordable housing. While, price still

remains at elevated levels, new properties being launched at lower price points are a welcome move and

generate prospects of moving towards efficiency in the long run.

The spotlight now lies on the fourth and final quarter of 2012-2013 which will help us to draw conclusion

on the overall performance of the Indian residential sector. Moreover, announcements made in the

Union Budget 2013-14 are also likely to have repercussions on the market and the prevailing sentiment.

Final quarter awaited with bated breath


11/12

Glossary of Terms used:

Disclaimer

Inventory: Inventory is the unsold stock between two dates of survey. It covers all new launches (new

additions) as well as carried-forward inventory from the previous survey: Previous Unsold + New

Additions.

Weighted Average Price: This represents average price of the city/location against the unsold stock.

every projects unsold stock is multiplied with its price and summation of this product is divided by total

unsold stock to derive the weighted average price.

Sales Velocity: This signifies demand supply scenario in a market. It is the ratio between monthly sales

and total supply and gives an idea of gestation period of a project as per the existing dynamics. Ideally SV

shall be between 2.75% and 3%. The pace translates into gestation period of a maximum of 36 months of

a project.

Value of stock sold: represents stock the value of the trade or in other words business done during the

period. This is calculated by multiplying the sq. ft. sold during the period with prevailing prices.

Months Inventory: This represents the number of months required for the inventory in the market to be

absorbed according to the existing demand. It is calculated by dividing the closing stock (marketable

stock) by monthly sales.

FY-Fiscal year starting from 1st of April and ending on 31st March.

Q3- Quarter ending December

The information provided in this report is basd on the data collected by Liases Foras. Liases Foras hastaken due care in the collection of the data. However, Liases Foras does not warranty the correctness

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12/12

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Residential Real Estate Report Q3