Mumbai saw 5% jump in property prices as NCR prices zoomed 17% sequentially in the first quarter.
Property prices in the top four markets — Mumbai, National Capital Region (NCR), Bangalore and Chennai — held firm or rose in the quarter ended June despite sales going downhill.
Prices in Mumbai increased 5% from the preceding quarter, while in the NCR, the rise was a whopping 17%, according to Mumbai-based real estate research firm Liases Foras.
Bangalore, too, saw a sequential increase — at 3%. Only Chennai wrote in with a marginal drop of 1%.
Prices were up on a year-on-year basis, too, with Mumbai posting a 27% rise, NCR 5%, Bangalore 28% and Chennai 8%.
In Hyderabad, which figures in the top six markets, sales recovered somewhat following a correction in prices and a drop in fresh supply.
Pune, also among the top six markets, also saw healthy sales despite a rise in prices and unsold inventory. Prices rose 7% on the previous quarter and 20% on year.
The total unsold stock in the top six markets at the end of June stood at 503 million square feet (msf), compared with 471.91 msf at March-end, according to Liases Foras’ Ressex, or real estate sensitivity index, data. This unsold stock could take around 26 months to be sold at the current pace of sales, compared with the preferred rate of 8-10 months, the research firm noted.
NCR had the lion’s share of the unsold inventory with around 220 msf (194 msf at March end), which is expected to take around 30 months to be completely sold as against a projected 22 months at March-end.
The unsold stock in Mumbai was up marginally at 108 msf (105 msf). However, the city has the highest inventory clearance period among the top six cities and could take a good 40 months to clear the stock, up from a projected 35 months at March-end.
In Pune, the unsold stock increased from 36 msf at March-end to 39 msf at the end of June, though the number of months required to clear this stock was at a healthy 12 months.
Only in Hyderabad did the inventory come down — from 45 msf to 42 msf — and the clearance pace also reduced from 23 months to 20 months following a 3% correction in prices.
Pankaj Kapoor, founder and CEO, Liases Foras, attributed the improvement in Hyderabad market to the double effect of bottomed-out property prices and fresh supply constraints.
“Hyderabad in general has strong market fundamentals. There has been no fresh supply coming in the past few quarters. Thus, we see this improvement due to supply-side constraints,” says Anand Narayan, director - residency at Knight Frank India.
With approvals for fresh projects getting scarce, Narayan expects a similar constraint in markets like Mumbai. Kapoor sees a 30-35% price correction across markets over the next two years.
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