Property consultant Knight Frank in its recent report 'India Real Estate Outlook' said due to a slowing demand environment, residential sales across top six cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Hyderabad and Chennai, dropped during 2014.
The country's residential property market in 2014 witnessed a 28% decline in launches and 17% dip in sales volume, as compared to 2013, according to a report.
Property consultant Knight Frank in its recent report 'India Real Estate Outlook' said due to a slowing demand environment, residential sales across top six cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Hyderabad and Chennai, dropped during 2014.
The office space segment, however, performed well during the year on the back of recovery in the domestic market which fuelled higher demand for commercial space.
"Due to a correction in stake-holder sentiment on the back of a slowing demand environment, residential sales dropped during 2014. Office markets across the top six cities, however, displayed a turnaround during the year, mainly backed by the IT/ITeS and BFSI sectors," Knight Frank Chief Economist and Director Research Samantak Das told reporters here today.
While sales volumes in the residential segment fell by 17%, launches dropped by 28% compared to 2013. On the commercial space, absorption rose by 14%, while completions declined by six per cent compared to 2013.
A total of 234,930 units were sold during 2014 compared to 284,550 units in 2013. Similarly, 268,950 units were launched in 2014, against 372,160 units in 2013.
Mumbai witnessed the sharpest decrease in new launches, at 43% during 2014, followed by Hyderabad, with a 30% drop.
NCR witnessed the sharpest decrease in sales volume, at 43%, during 2014, followed by Hyderabad, with an 18% drop. Mumbai, however, continued to retain the top slot among the top six cities for achieving the highest sales volume in 2014. This was followed by Bengaluru.
Mumbai Market
"Sales in Mumbai residential market showed a 9% decline in 2014 against substantial de-growth of 43% in launches. On the back of better consumer sentiment, sales improved moderately in the second half of 2014.
"But taking cognisance of the lower?than-anticipated pick up in sales, they curtailed launches. These factors led to an improvement in demand-supply equilibrium, thereby marginally lowering the unsold inventory levels," Das said.
He further said renewed economic sentiment has started to reflect on the MMR office absorption numbers.
"The metropolitan region is on a 3-year high in terms of office space transactions, and going forward, we believe that the improving economic momentum and easing monetary stand will revitalise business prospects of driver industries," he said.
The consultant has predicted an overall improvement in the residential sales and office space absorption in the first half (January-June) of 2015.
"Going forward, the sales volume is expected to witness a moderate growth of four per cent in H1 2015 compared to January-June 2014. However, new launches will continue to fall by four per cent during the same period.
On the office space front, the vacancy levels is expected to fall even further, to 16.9% during the period," Das said.
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