Home sales are down by 8 per cent

As per the latest reports of firm Liases Foras, the sales of Home are down by 8 per cent in top six cities of the country over the year-ago quarter, but India rose 2 per cent sequentially in the last quarter.

After the recent reports it’s clear that year-on year basis the sales of home are fell by 37 per cent in the NCR region while the sales of home was up by 8 per cent in the Mumbai. Whereas; Hyderabad was emerged as the best performing real estate market with more than 46 per cent year-on–year jump in the sales of home and it was followed by the Pune where sales was up by 22 per cent, in Bengaluru the home sales was increased by more than 5 per cent and in Chennai the home sales was up by 40 per cent.

In the report of quarter-on-quarter basis it is recorded that the sales in Chennai and Mumbai were up by 24 per cent and 25 per cent respectively and the sales was up by 31 per cent in Bengaluru whereas; the sales were down by 27 per cent in NCR region. The price of properties in Hyderabad, the Mumbai Metropolitan Area, NCR, Pune, Bengaluru and Chennai remained stable in the last two years on the year-on-year and quarter-on-quarter basis.

After analyzing the latest property trends it’s clear that unsold housing inventory level is so much up in the top six cities and it’s of about 853.09 million sq ft or about 650,000 apartments between the period of January to March quarter however; in the previous quarter it was about 832.09 million sq ft. Among all the real estate market, NCR had the highest unsold inventory with the 321.68 million sq ft area and it is expected it will take more than 71 months to sell these unsold inventories. However; Mumbai Metropolitan Region has the 192.27 million sq. ft as the inventory which will take about 46 months to be sold these spaces. And Bengaluru is among the best performing real estate market among the larger ones which have more than 152.43 million sq ft area and it is expected that it will take more than 27 months to sell them.

As per the reports of Liases Foras, the new supply in the current quarter rose about 21 per cent over the previous quarter which was about 36 per cent because the new supply came in the range of Rs 50 lakh to Rs 1 crore followed by 29 per cent in the range Rs 25 lakh to Rs 50 lakh. Reports stated that the units of two bedrooms constituted 36 per cent in the new supply which was followed by three bedroom units at 35 per cent. MMR and Bengaluru have 28 per cent and 31 per cent of the new supply respectively.

More than 15 Sr. executives from the real estate firms of Mumbai have moved to Bengaluru

We all know that Mumbai is the financial capital of the country and it is the city where most of the leading real estate developers have their head offices. According to recent survey Bengaluru based real estate firms are well impressed with the skills of those who are working in the Mumbai based real estate firms and due to that most of the Bengaluru based leading real estate are approaching to Sr. Executives and consultants for the top position who are working for Mumbai’s developers.

In last, one year more than 15 Sr. executives from the real estate firms of Mumbai have moved to Bengaluru, yet it is true that currently the sale of residential property and apartments in the financial capital of country is slow. In the latest moves, Om Ahuja, CEO of residential services at Jones Lang LaSalle in Mumbai head office, joined Brigade group as the CEO of residential services in Bengaluru. However; 8 months before Ozone group hired the Srinivasan Gopalan on the position of CEO whereas; earlier he was the COO and CFO of Wadhwa group, a Mumbai based real estate firm. Bhavesh Kamdar was earlier with L&T Realty, but recently he joined Embassy group as the head of leasing department.

Om Ahuja, who recently joined Brigade group, stated that in Bengaluru the prospect of joining new company as CEO in the largest division of Brigade group has credible track record and I think that experience in building the best quality integrated townships is responsible to list it in stock exchanges and it has been also rated as the great place to work from last few years and due to that the decision to move to Bengaluru was easy for me even after spending 20 years in Mumbai.

Why real estate market of Bengaluru is attracting real estate professional?

On the issue of moving to Bengaluru, the experts are saying that the real estate market in Mumbai getting saturated and due to that now it’s difficult to move the prices up. In Mumbai real estate investors have made just little money in past two to three years, but these days Bengaluru is witnessing the huge growth in terms of property development as well as price of real estate market and due to that in past eight months of duration the city has witness the sales of more than nine million square feet of commercial space. In Mumbai the property prices has been decline from 7 to 12 per cent from October 2014, with the total drop of 15 per cent on its peak level, as per the reports of Edelweiss Securities.

Current real estate market of Bengaluru:

These days Mumbai based real estate developers are battling high on the residential and commercial inventories.  However; the number of unsold residential and commercial units in the city was highest in India which was approx. 200,000 till December 2014. But it was expected that this quarter Mumbai will take more than 11. 5 quarters to sale its unsold inventory and NCR (National Capital Region) 13.8 quarters, while Bengaluru will take only 7 quarters. Still there is boom for office space and it is fuelled the demand for homes buyers in Bengaluru, however; the city has accounted more than 49 per cent office space absorption in 2014, according to the reports of Colliers International Bengaluru has absorbed 13.77 million sq ft of office space in 2014.

The Gopalan added that Bengaluru based real estate developers are more transparent, professionals and they willing to share project ownership with other private equity firms however; these are not the case with Mumbai based real estate developers. In Mumbai, CFO’s of the organizations run the whole show, but in Bengaluru it is the CEO who is responsible to call the shots with the focused operation.

Top three cities to invest

In past three years it has been noticed that property prices increased sharply in most of the major cities in country and Bengaluru, Chennai and Ahmedabad are among top three cities from where one can draw the maximum ROI. While analyzing the property price figures for the duration of Jan to Mar 2015 quarter it is clear that the areas such as; Nungambakkam in Chennai, Silk Board in Bengaluru and Ghatlodiain Ahmedabad witnessed the highest price appreciation, which is the main reason of joy for those who have invested in above mentioned areas. However the analysis is following;

1. Area: Nungambakkam

City: Chennai

Due to latest infrastructure development work and other large projects in favor of Nungambakkam, its only re-development of old projects which led the property price to rise by the value of 8.18 per cent in Nugambakkam in last three months. Retail outlets, Government quarters, hotels and restaurants, are the main attraction of the area however the Nungambakkam is oldest habituated locality in Chennai. Most of the real estate builders have launched their new projects in the region however for some real estate projects construction work is underway, as per the statement of Velmurugan V, a real estate agent from a broker firm.

As Nungambakkam is close to city centre so it is easily connected with rest of the city however; Nungambakkam is mostly housed by the elites of the Chennai, NRIs and HNIs. Here property values in the range of Rs 14, 000 to 18, 600 per sq ft and it makes the Nungambakkam one of the premium areas of city.

2. Area: Silk Board

City : Bengaluru

In past three months the property prices for Silk Board have increased by 10.45 per cent. The main question is that what is working in the favor of this locality? So perfect answer is it’s all about strategic location and connectivity with Outer Ring Road as well as IT areas like; Electronic City, ITPL, and Marathahalli.

Due to being the premium and most busy region in the city Silk Board is famous for arguably being worst traffic spot, but in near future the place is going to witness the several infrastructure up gradation. Everyday millions of people pass through the CBS (Central Silk Board) junction including both public and private transport which is the main reason for long traffic jams.

However the construction work for Elevated Expressway is underway and it is expected that this Expressway will reduce the travel time between Electronic City and Silk Board Junction and it will also help the nearby areas. Current property rates in the area are around Rs 2, 600 to 3, 500 per sq ft.

3. Area: Ghatlodia 

City: Ahmedabad

Ahmedabad is not the metro city, but still the localities of Ahmedabad are able to provide good return on property investment as here few localities are giving strong competition to the premium areas of metro cities and for that the best example is Ghatlodia, as this locality has witnessed more than 8.11 per cent price appreciation in last three months duration.

Here most of the potential customers are the professionals, which are moving in city due to its relaxed lifestyle and affordability, as per the statement of Pragnesh Korat, who is real estate expert in Aakar Estate. The main advantage of Ghatlodia area is that this area is situated near by SG Highway, which directly connects the SP Ring Road through Science City Road. Ghatlodia area shares neighborhoods with some of the most develop areas as well as expensive localities such as; Naranpura and Memnagar. Current property rates in Ghatlodia area are approx. Rs 3, 300 to 4, 100 per sq ft.

Supertech is planning to invest amount Rs 2, 400 crore

Leading developer, Supertech is planning to invest the hard cash amount of Rs 2, 400 crore to construct and develop the township at Gurgaon, Haryana in a span of five years. This township will be developed on an area of 140 acres land, which company has bought recently from Parsvnath Developers.

As per the statement of Mohit Arora, Managing Director of Supertech, “Recently our company has done dream deal, which is to buy 140 acres land from Parsvnath Developers; however the cost of deal was about Rs 7, 00 crore”. Supertech, which is one of the fastest growing real estate firm based out Noida will develop advanced integrated township on this land area at Sohna, Gurgaon, the more he added.

In an integrated township, Supertech is planning to develop more than 1,800 independent homes as well as villas and more than 1,900 flats, however it will be the fourth largest project of the company. While talking about investment Arora stated that it is expected that total cost of township will be about Rs 2,400 crore including Rs 700 crore of land cost. The more added that we have made payment for land and we are planning to raise Rs 500 to 700 crore from bank debt to meet the cost of construction; however the rest will be founded through internal accruals as well as sales bookings in project.

The whole township will be developed in different phases and it is expected that whole construction will be completed by year 2020. Supertech has fixed the BSP (Basic Selling Price) for this particular township project, is Rs 4,400 – 4,750 per sq ft and it will also depand on the payment plan. In September 2014, Parsvnath Developers had sold the land to Supertech in a deal of Rs 665 crore.

Till now Supertech has completed the construction for more than 33 million sq ft real estate in different projects and currently company is working on 90 million sq ft area in many different projects. Apart from Greater Noida or Noida or as well as in Gurgaon, Supertech has also marked its presence in other cities also such as; Rudrapur, Moradabad, Ghaziabad, Meerut, Bengaluru, Haridwar and Moradabad.