Real estate consultancy Knight Frank India says that the national capital region (NCR) registered a whopping 20 percent drop in new launches in 2015. This was coupled with negligible price appreciation and weak absorption.
Half-constructed buildings, developable land where ground-breaking has been postponed indefinitely, unsold inventories - these were common sights across India through 2015. Sights that meant India's top residential markets remained in the red for most of the year.
Real estate consultancy Knight Frank India says that the national capital region (NCR) registered a whopping 20 percent drop in new launches in 2015. This was coupled with negligible price appreciation and weak absorption. What's more distressing is that existing inventory in the region will take a full four years to be sold.
The situation is no better in Mumbai. The city's residential market has registered a 23 percent drop in launches, and a worrying 8 percent fall in absorption.
“NCR is really under deep pressure. Launches and sales have both crashed. Mumbai, what is happening is launches have gone down drastically, and sales are holding, but there is no real sign of recovery,” said Samantak Das, Chief Economist, Knight Frank India.
Speaking of the western region, Pune has delivered a pleasant surprise. While launches are down 8 percent, absorption saw a 4 percent uptick.
“As far as Pune is concerned, it has surprised many of us. That market is growing from strength to strength and even in terms of future outlook, we see a very strong market going forward,” said Gulam Zia, Executive director, Knight Frank India.
Bangalore saw a 5-year low in the number of new launches, though residential prices appreciated 4 percent in the second-half of the year. Interestingly, nearly 88 percent of Bangalore's new launches were homes priced below Rs 25 lakh.
Chennai has also been an abysmal market. Prices rose a meager 1.5 percent year-on-year - its lowest in 5 years. Of course, the floods towards the end of the year have wreaked havoc on the property market.
Hyderabad, meanwhile, registered a similar fall in launches, but has made no headway when it comes to absorption. Prices have appreciated 3.1 percent over the year.
Kanchana Krishnan, Director, Knight Frank Chennai, said: "In markets like Bangalore and Hyderabad, we are expecting sales to pick up and do well in 2016. Chennai will take a bit of time, but will follow suit."
This leaves a big question mark for 2016. While there is hope that some of these trends will see a reversal, especially given the government's push for affordable housing, experts advice caution.
After all, it will make no sense to launch new projects till funds become cheaper, clearances become easier, and inventories come down.
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