New Delhi: In what may be seen as signs of recovery within the real estate sector, 10 out of the 12 key residential markets of India showed positive market dynamics in the last quarter of 2019 with the south Indian market emerging as the best performing one, a recent report states.
According to Magicbricks PropIndex Report Q4 2019, while some areas faced downward pressure on prices and reduction in supply, searches remained robust within the affordable housing segment. The trend emerging from the 12 key cities also suggests that India is looking for houses under Rs 4,000 – Rs 5,000 per square feet.
South Indian markets including Bengaluru, Hyderabad and Chennai emerged as India’s best performing residential real estate markets.
Sudhir Pai, CEO, Magicbricks says the findings indicate that consumer searches have remained robust in the affordable segment making up a significant 40 per cent of the searches on Magicbricks.
“Credit Linked Subsidy Scheme under PMAY has led to increased buyer interest in the affordable and lower-mid segment. In most cities, supply-managed to keep pace with the demand. The highlight, however, is the south India market that continued to resist recessionary pressures, with prices appreciating in all three cities of Hyderabad, Chennai and Bengaluru,” he says.
The PropIndex report also suggests that the industry could recover from the liquidity crisis, as more trusted developers are dominating new supply and big-ticket projects like metros and roads are encouraging the sales volumes in the peripheral areas.
According to the report, supply-managed to keep pace with the demand maintaining stagnant prices across cities. The premium segment witnessed price declines in most tier-I cities, as above Rs 10,000 per sqft buyers looked for negotiated deals.
The PropIndex also suggested that besides the southern cities of Hyderabad, Chennai and Bengaluru as well as western India’s Pune and Navi Mumbai are also doing commercially well. Also, affordable satellite cities such as Noida and Thane are gathering pace due to the infrastructure and connectivity with the main employment hubs.
In terms of individual city performance, Bengaluru showed steady growth in the residential market with an increase of a strong 25 per cent in the last five years, beating the sectoral woes. Hyderabad observed a consistent upward trend in prices, which rose by 3.8 per cent from Rs 5,400 per square feet in Q3 to Rs 5,600 per square feet in Q4.
Demand also started to pick up in Chennai in the last one year, with prices moving in tandem, rising a moderate 5 per cent year-on-year.
In Delhi, the demand has started to pick-up as well, but the options are limited. While the city prices remained low in the last five years, an increase of 1.8 per cent in the last one year indicates a positive development for the residential segment of the city, the report states.
“Although the residential demand in Gurugram has been dull, the city’s improving infrastructure could boost demand. Average city level prices are hovering between Rs 7000-8000 per sqft, significantly higher than the other satellite cities of Delhi,” it said.
However in Noida and Greater Noida, despite demand matching supply, affordability, and lower interest rates, the housing markets are struggling to pick-up. While Noida’s average prices fell by 10 per cent, Greater Noida witnessed an increase of just 3.6 per cent in the last five years.
In Mumbai, the city level weighted average prices have remained stagnant for the past five years, while the premium segment remained under pressure