In case of new launches, six cities show a movement towards the mid-segment. These can be attributed to the return of buyer confidence in the residential market.
In Bangalore, there has been a decline in unsold inventory. Owing to a partial bounce back in absorption levels, the unsold inventory records a constant decrease Q4 2008 onwards. Also, the affordable housing sector seems to be losing its competitiveness.
The transacted prices in affordable segment have witnessed an upward trend Q1 2009 onward.
Also, the mid-housing segment records stable pricing, and a marginal decline. The average transacted prices in the mid-segment exhibit stable levels with a correction in villa prices.
The study focuses on the performance of the residential market with specific reference to the mid-segment and the much-talked-about affordable segment across Bangalore, Chennai, Delhi, Gurgaon, Noida, Greater Noida, Ghaziabad, Faridabad, Mumbai, Navi Mumbai, Thane, Chandigarh and Mohali.
The study takes into account the time when the initial euphoria of the affordable housing had settled and captures the current movement towards the mid-housing segment.
The key inferences that can be drawn from some major markets are:
Mumbai: The city is demonstrating its maturity as a market with an increase in prices in the affordable segment after a price correction phase in Q2 and Q3 2009. However the mid-segment has registered stable pricing. A healthy trend of absorption in the first half of 2009, has reduced the unsold inventory exhibiting a positive buying behaviour in the market.
Pune: The second quarter of 2009 witnessed the highest residential activity in terms of new launches and absorption in Pune. The city has witnessed a series of new launches which added 5300 units in Q2 of 2009. Trend of absorption shows the share of mid segment increasing from 47% in Q4 2008 to 57% in Q4 2009. The city seems to be experiencing a revival of genuine demand without any significant price corrections.
Gurgaon: Absorption levels have bounced back to scale the peaks which were recorded during early 2008. Both, the mid and higher segments are scripting a new growth story with an encouraging recovery in absorption and 8000 units being absorbed in a year.
Interestingly the affordable segment is only a marginal participant. Sales of the affordable segment have gradually declined post Q1 2009. Price trends show a downward correction to the tune of 10%-15%, which has enabled a higher absorption velocity on grounds of rational pricing.
Noida: The third quarter of 2009 saw a zenith in the Noida market with a fresh influx of 15,500 residential units. The market also witnessed a correction of price in both the affordable and mid-segment categories. The salient pricing has caught the attention of the investor community making Noida market a hot destination amongst all NCR options.
The lull shadow from the period of Q3 2008 to Q1 2009, has been overthrown by healthy absorption levels due to a number of factors such as abundant land stock, construction of the Greater Noida Expressway, ‘Value-for-Money’ options, subsequent cheaper launches and thus one can actually observe a significant boost in absorption levels.
