NEW DELHI: India’s real estate industry can hope for an impressive turnaround in 2018 as the October-December 2017 quarter witnessed an average price increase of 3.1% in 46% of the 750 localities across 14 major cities, reports Magicbricks PropIndex, the flagship quarterly report of India’s No.1 property site.
Also what was more encouraging was the fact that the Magicbricks’ National Price Index (NPI) after remaining stagnant for almost two years, had seen the first price gain in the July-September 2017 quarter and this has continued in the October-December quarter as well with just under 1% increment.
Commenting on the latest PropIndex report, Sudhir Pai, CEO Magicbricks.com said, “After almost two years, the National Price Index of Magicbricks PropIndex had seen first price gain in Jul-Sep 2017 quarter and this positive sentiment continues in Oct-Dec 2017 with just under 1% increment. This has further translated into 45% of 750+ localities covered under PropIndex witnessing price increment. More importantly, the crucial Rs.3,000-6,000 per sq.ft bracket, which accounts for more than 50% share of property searches, has remained stable. Though 2017 remained challenging in terms of business, there was no dearth of interest among the home buyers. Our data suggests that 15 lakh Indians actively searched on the Magicbricks platform to buy homes. Real Estate remains a desirable asset class for Indians at large.”
With the introduction of a series of policy interventions like RERA, GST & PMAY, 2017 has been a momentous year for the real estate industry. Regardless of the challenges and limited transactions, the market remained positive for the prospective homebuyer. South and West regions of India continued to witness price gain in Oct-Nov’17 quarter while North and East regions were either stagnant or saw marginal decline.
The PropIndex also revealed that the crucial Rs.3,000-6,000 per sq.ft bracket, which accounts for more than 50% share of property searches, remained stable and Ready-To-Move (RM) properties at national level continued to command about 3.7% premium over Under Construction (UC) properties. The price difference between UC-RM properties narrowed down in Oct-Dec 2017 and this is the sixth straight quarter of decline in price difference, bringing down the difference from a high of more than 9% prevailing six quarters back. UC segment too observed price gain in 12 out of 14 cities while the RM properties saw many takers.
Following the trends of Sept quarter, Southern markets like Hyderabad, Chennai and Bangalore continued to witness encouraging quarterly price changes ranging from 1.5 % to 3.5%. On the other hand, western markets like Ahmedabad, Pune, Thane, Mumbai and Navi Mumbai have seen price appreciation ranging from 0.5 % to 1.5%. Noida, Greater Noida and Ghaziabad regions in North have witnessed price decline fluctuating from 1.5% to 1%. Gurgaon and Delhi saw a price declined of approximately 1% and Kolkata from the East market saw a marginal drop of around 0.25%.
To sum up, the pent up in consumer searches in Oct-Nov quarter is expected to translate into on ground transactions on the account of three factors very soon. Firstly, the lack of new project launches in the last 18 months, which has eased off the supply in the market. Secondly, with prices remaining mostly stagnant in the previous two-three years, property purchases can now effectively be done at 2014 or 2015 rates. Finally, the amount of Ready-to-Move projects is riding high in the market, and this will bring down the consumer risk associated with timely delivery of projects. Overall 2018 seem to be positive for real estate and a small testimonial to this is the constructive performance of Infrastructure related stocks in the stock market.