In April-June quarter of current financial year- 24,000 fresh residential units were launched in top six metro cities with Bengaluru witnessing the maximum number of new residential launches.
India’s real estate market may be reeling under sluggish growth but the residential market is going through a very interesting curve right now. On one side developers are struggling hard to sell their swelling inventories and on the other hand India’s top six realty markets have witnessed green shoot of recovery in terms of new launches during the second quarter of this year. According to the report by Colliers International, India – Q2 2016 has shown clear sign of comeback in terms of new launches and sales. Happykeys brings the findings of the quarterly report that shows the residential market on the cusp of recovery.
Key findings of the report
Major new launches: The high volume of new launches during the second quarter was primarily driven by top six metro cities – Bengaluru, Pune, Mumbai, Chennai, Gurgaon and Noida. These cities saw a launch of about 24,000 new residential units. If we add up H1 2016, it is total to around 42,000 units in the current financial year.
Bright spot: The real estate market of Bengaluru has been always the star performer in terms of highest counts residential units as well as office space absorption. In this quarter too, the city performed exceedingly well. About 48 per cent of the total units is accounted for Bengaluru, followed by Pune 21 per cent and Mumbai 16 per cent in this current quarter.
According to the latest report released by real estate consultancy firm JLL India also, Bangalore and Pune would be the two markets which would see a favourable price rise over a period of time. Bengaluru performance is noticeable as new launches having almost doubled from quarter 01 2016 at nearly 11,500 units at the end of April-June quarter.
The Chennai residential market saw recovery but at a slow pace as new launches here remained steady over the last quarter and witnessed 2,100 units of new launches. This is only because of over confidence among new realty developers and investors owing to a stable state government retaining power following the Tamil Nadu Assembly Elections.
If we look at Pune residential market, it stood at second after Bengaluru. The market has witnessed new launches of 5,000 units which is 7,200 in total if we add up launches of Q1. However, these unit were launched in only a select micro markets where a few developers have launched huge residential projects on large land parcels. Most of these are catering to luxury or high end segment.
Noida and Gurgaon residential market remained low in the second quarter also in terms of new launches as the market is flooded with huge inventories and that created a vast gap between supply and demand. Developers also kept their maximum effort to sell their existing inventories. Gurgaon witnessed 1,580 new units in the category of mid-luxury segment while in Noida, almost 6,000 units were issued completion certificates.
Primary catalyst behind the high volume of new launches
Constant demand from end-users and healthy rate of take-off and occupancy of office and retail market have contributed to the development of new residential clusters across the country. Favourable policies such as RERA, new exit policy and 100 per cent FDI norms in single brand retail are the primary catalyst behind the high volume of new launches in this quarter.