New residential launches decline
Delhi-NCR was the only area that registered correction in its quoted capital values during the year
New residential unit launches across top eight cities declined by 12% year-on-year in 2014 with launches totalling 153,000 units. The top three cities of Bengaluru (27%), NCR (17%) and Mumbai (16%) comprised of 60% of the total new launches in 2014. The number of new unit launches dropped substantially (46%) in Hyderabad as developers reconciled to the changing market dynamics post the bifurcation of the state.
Delhi-NCR was the only city that registered correction in its quoted capital values during the year. Apart from Noida, which witnessed an appreciation of 5-6% in both mid and high-end properties, quoted capital values corrected in the range of 2-11% due to high levels of unsold inventory in other submarkets within the NCR. South- east Delhi submarket comprising of locations such as New Friends Colony, Kalindi Colony, Ishwar Nagar, Kailash Colony, etc. registered highest year-on-year capital value correction of 11% in mid segment units. The luxury segment in Gurgaon recorded highest annual correction of 7%, across the top eight cities due to subdued demand for these high-priced units, says a report by international property consultants - Cushman & Wakefield.
In 2014, approximately 27,000 units were launched in DelhiNCR, a 30% decline from the previous year. Due to subdued demand and significant unsold inventory, developers launched fewer projects in 2014. In 2014, majority of the projects were launched in the suburban and peripheral locations and were targeted at affordable and mid segments, which have witnessed continued demand. About 61% of new unit launches were in Noida i n submarkets such as Central Noida Extension, Yamuna Expressway and Noida Extension. Gurgaon witnessed launches primarily in the affordable segment along Sohna Road and mid segment along the SPR (Southern Peripheral Road) and in New Gurgaon. Mid segment had the highest share (69%) in total units launched during the year, followed by affordable segment (22%). Developers offered heavy discounts as well as various payment schemes/ plans were given to woo buyers and garner sales. However, the overall transaction activity remained subdued during the year. Delhi government’s decision to hike circle rates further hampered the buyer sentiments. Apart from Noida, which witnessed an appreciation of 5-6% in both mid and high-end properties in the third quarter of 2014 (primarily due to significant progress in approvals on the extension of metro line from Noida City Centre), quoted capital values corrected in the range of 2-11% due to high levels of unsold inventory in other submarkets within Delhi-NCR.
Mid segment residential units continued to remain a favourite amongst developers with a two-third share in total launches; also, unit launches in this segment increased by 5% from the previous year. Unit launches in the high-end segment dipped by 29% in a year; whilst in the affordable segment they declined by 38% from the previous year. Although luxury units contributed only 1% to total unit launches, it increased by five times from the previous year, the report added.