Buyers remained cautious but searched well for aspirational homes. Developers remained restrained but projects reached completion stages as all segments of the market prepared for a growth phase in Indian property market, aligned to the political optimism in India.
July 29, 2014: The first edition of Magicbricks’ PropIndex, Volume IV (Apr-Jun 2014) reported a largely stable matrix of demand and supply, reflecting little change in index values. However, while Delhi’s city index dropped by 4 per cent, the highest in quarter predictably the National index remained stable, up by 1 per cent.
The highlight of the PropIndex however, was the drop in demand for affordable properties (budget range of Rs up to Rs 20 lakh) which remained significantly low at the national level (1%). Even at city levels, demand in this category fluctuated between a modest 1-5 per cent. As a result, supply in the segment led the existing demand in almost all cities, contrary to the industry buzz that the category is undersupplied and in greater demand, reports Magicbricks.
The gap between demand and supply was most glaring in the southern cities of Chennai and Hyderabad. While an over-supply of 17-19 per cent was noted in these two cities, Bangalore also recorded an over-supply of 8 per cent. The gap was limited to 3-4 per cent in other cities like Mumbai, Pune and Delhi. While Gurgaon was the only city where demand and supply was almost matched according to the Magicbricks PropIndex.
In contrast, the demand for luxury properties at the national level inched up to almost 30 per cent for properties priced at Rs 1 crore and above. However, even though demand has moved up, the luxury segment remains over-supplied in almost all cities states the Magicbicks report. Noida, Gurgaon and Ghaziabad were the only exceptions. While in Noida and Gurgaon, supply matched demand in the category, in Ghaziabad supply lagged behind the demand by 11 per cent.
At least a quarter of the city-wise demand was for the Rs 30-50 lakh category, showing that the middle class remained active and willing to buy.
Rental values across cities either dropped or stabilised in this quarter as compared to the Jan-Mar 2014 quarter. This is in direct contrast to the previous quarter, where PropIndex showed rental markets had witnessed a hike of 5-10 per cent approximately. As sales enquiries rose, rental demand posted a corresponding drop. According to Magicbricks, rental values dropped by approximately 5-6 per cent across cities in different localities.
The PropIndex states that the 2BHK unit remained the most popular category across cities, combined affordability and came packaged with facilities, this reflects the aspiration of urban dwellers to own a property that would match their lifestyles.
Demand preferences remained unchanged from the previous quarter’s PropIndex report, but were not evenly spread across the city. Locations near economic corridors continued to post greater demand. However, unlike the previous quarter, besides IT, the manufacturing sector too, drove demand in some cities, such as Chennai.
Ms. E Jayashree Kurup, Research Head, Magicbricks remarked, “With the recently announced Budget addressing several pressing issues of the housing sector has infused some positive sentiments in the market, the real impact of the same would be visible only after these measures are implemented.”