New Home Launches in India's Top Cities Experience a Decline
Cushman & Wakefield revealed a decrease of 16% in new home launches across India's leading cities. The global property consultant's analysis encompassed the top eight urban centers in the nation. The market analysis indicates some key changes.
New home launches declined: reported Cushman And Wakefield.
The Cushman & Wakefield report indicates that approximately 162,000 housing units were introduced in the top eight cities of India during 2012. This figure represents a 16% decrease compared to the number of new home launches in 2011.
The study concentrated on home launches in key metropolitan areas that included NCR, Mumbai, Bangalore, Chennai, Kolkata, Pune, Hyderabad, and Ahmedabad. Their research led the global property consultant to conclude that the residential real estate market throughout India experienced a general downturn.
Of the 162,000 housing units launched, a significant 83% were aimed at the middle-income housing segment. The decline was particularly noticeable in the National Capital Region, Hyderabad, Bangalore, Chennai, and Ahmedabad. While these cities experienced a decline in new home launches, Pune, Mumbai, and Kolkata saw an increase in the number of new properties introduced.
New home launches decline by 16%.
NCR led in terms of the number of launches, with approximately 54,500 housing units introduced in 2012. Pune secured the second position with 24,000 new launches, while Mumbai and Chennai followed with 22,500 and 20,800 new home launches respectively for third and fourth positions.
Sanjay Dutt, Executive Managing Director at C&W South Asia, stated, "Real estate players remained cautious about the residential market." He further noted that 2012 was notable for the implementation of innovative marketing techniques. Due to concerns about the end-user market, many developers chose to withdraw from larger projects.
According to Mr. Dutt, buyers became more sensitive to pricing due to high inflation and slow economic growth. The situation was compounded by increased interest rates. He also pointed out that builders facing financial challenges refrained from initiating new projects, viewing this as a strategy to mitigate further risk.
Mr. Dutt also mentioned, "However, this challenging period for builders has attracted numerous investors." Consequently, real estate investment in the residential sector has strengthened. These investors view this as an opportune moment to enter the market, where developers have an increased requirement for funding.