Cheer in the realty sector as home sales increase by 6%

Aided by stagnant pricing, discounts from builders and launch of new projects at lower prices led to increased Home sales by 6% in the January-March quarter from that a year ago across eight top cities of India, according to a report by property research firm Liases Foras.

For the first time since January March 2014, the total sales across eight tier 1cities crossed 60,000 units. “The gap between prices of apartments and affordability has reduced to some extent, which has helped sales. It is an end-user driven market today,” said Pankaj Kapoor, managing director of Liases Foras.

Real estate Sales in the National Capital Region were up 33% and in Mumbai 12%, while in Bengaluru sales dropped 18%. Ahmedabad went up 32% in property transactions, whereas Chennai and Hyderabad witnessed a 25 per cent and 20% growth respectively. Kolkata was up by 14% while sales in Pune declined by 25%.

Although Prices remained flat in Mumbai, NCR saw a correction of 3% from a year ago, helping developers push their stock. Ahmedabad is the only city to witness double-digit growth in prices at 12%, the report observed.

Sales of houses under Rs 25 lakh increased 46% in the past one year while sales in the Rs 25-50 lakh bracket grew 13%, signifying greater affordability of homes.

“With prices remaining stagnant over the past two years across  markets coupled with falling interest rates on home loans, more people have started buying homes,” said Getamber Anand, national president of the Confederation of  Real Estate Developers Associations of India.

“The economy is booming; money is being spent on infrastructure. If there are good rains this year, the impact on home sales would be even higher,” said Niranjan Hiranandani of the Mumbai based Hiranandani Group.

Pankaj Kapoor of Liases Foras said that, if builders in Mumbai are able to spruce property prices by a further 15 – 20%, home sales could perk up to three times of the number today.

Sale of home spaces increase by 7%

According to a report by property research firm Liases Foras, during the quarter to December 2015, sale of homes across the top eight cities of India improved by 7% year-on-year. Sales increased by 15% on a quarter on-quarter basis on the back of sluggish pricing and discounts by builders during the same period.

As per the report, an aggregate of 78 million sq ft of home space was purchased across the eight cities compared with 72.9 million sq ft a year ago.

Pankaj Kapoor, managing director of Liases Foras says, “It is a buyers’ market today. Geographies, which were predominantly investor driven, are still suffering while areas which were inhabited and more suited to end-users are seeing improvement in sales. Now the gap between affordability and pricing is reducing.”

While the purchase of home space has increased, the unsold stock has also shown an increasing trend showing 21% y-o-y and 5% q-o-q to 1,124.9 million sq ft. Unsold inventory in Mumbai rose 28% to 235.9 million sq ft while NCR rose to 361.1million sq ft, up 14% over last year.

The top cities have witnessed a decline in the total new launches with a decrease of 11% in q-o-q to 67.1 million sq ft., with NCR witnessing 61% decline in new launches during the quarter. Out of the total launches 52% of the new launches are in the price range of Rs.25-50 lakh. The number of new launches in the affordable category of under Rs.25 lakh has increased by 50% from the previous quarter.

Noting this Manoj Gaur, president, Confederation of Real Estate Developers Association of India (CREDAI), NCR, and managing director of Gaursons India, a real estate developer said, “Pricing has stagnated and inventory overhang is reducing because of lower number of new launches. Prices are close to the bottom, so end users are finding value.” To clear their unsold stock, many builders offered significant discounts during the festive period in 2015. Out of the total sales across the top eight cities, 31% of sales were in the price range of Rs.50 lakh to Rs.1 crore and about 30% of sales were in the price range of Rs 25-50 lakh.

Trump Group to construct luxury towers in Mumbai and Pune

Possible Republican nominee for US presidential elections, Donald Trump has recently spoken about India by stating how well the country is doing without being talked about.

Adding further he stated, “I have big jobs going up in India” referring to the two luxury real estate projects rightly named ‘Trump Tower’ that are coming up in Mumbai and Pune.

Signing a brand licensing agreement three years ago, Trump Group will be constructing a 75 storey tower in Worli in association with Lodha Group and a 22 storey twin tower in Pune with Panchshil Realty.

The projected real estate project includes a promise of “a host of exclusive lifestyle privileges, including a 24-hour Resident Manager and white-glove services, access to global Trump luxury properties and for the first time in India — a fractional membership to private jet service exclusively for Trump residents.”

Spread across on a 2.5 acre site with 44 luxurious condominiums across two towers of 22 storeys each, Trump Tower Pune will be the tallest residential building in that city. Each floor will have one expansive apartment of approximately 6,000 sq. ft. with five bedrooms and an exclusive home theatre room.

Adding further, the company stated the real estate property will have an exclusive range of carefully selected lifestyle amenities and services including fitness and recreational options, concierge service, pick-up and drop laundry service, and for the first time, an exclusive art gallery. There will also be a dedicated level for world-class leisure facilities such as John Abraham fitness centres, yoga room, jogging track, kids’ play area, swimming pools, library, business centre and game rooms.

Reviewing the proposed project, Pankaj Kapoor, Managing Director of real estate research firm Liases Foras said,  “These projects are for the high-end luxury market and they do not represent the market at large. Also, it is not that only because it is named Trump Towers, the companies are gaining from it in terms of sales. It is mainly the location and facilities which matter to the luxury market as well as the affordable housing market,”

Majiwada Thane Property Price Boom

According to an industry report, if the transport infrastructure projects announced by the Maharashtra Government in certain areas meet stated timelines, neighborhoods of Mumbai such as Madh-Marve, Majiwada-Kasarvadavali and Ulwe are likely to get costlier.

The report by real estate research & consultancy Knight Frank India highlights that properties in Majiwada-Kasarvadavali may get expensive by about 11.2 per cent due to the proposed construction of a Metro rail corridor from Wadala to Kasarvadavali over the next five years. Similarly, prices in the sea-front Madh-Marve are expected to increase by approximately 14.2 per cent on the back of a projected Versova-Madh sea bridge, and the Nariman Point-Kandivli coastal freeway. Further, in anticipation of the proposed Navi Mumbai International Airport and the much-delayed Sewri-Navi Mumbai Trans Harbour Link, The report estimates Ulwe to continue to see an uptick in price at 9.7 per cent rate per year, which has already inflated over the past few years.

Madh-Marve is the costliest of the three regions where Knight Frank has forecast a growth with an average rate of Rs 13,500 per square feet. While a Property at Majiwada-Kasarvadavali presently costs an average of Rs 8,000 per square feet, prices in Ulwe are floating around an average Rs 6,000 per square feet.

Pankaj Kapoor, Managing Director at Liases Foras, a Mumbai-based real estate research firm, said the low-profile areas of Mumbai are now benefiting because of the sky-rocketing prices in the high-end ones.