India's Housing Sector Sees Significant Slowdown in 2012
Capital Value Appreciation at an All-Time Low
According to a report by Jones Lang LaSalle India (JLL), the housing segment in India's top seven cities witnessed a substantial slowdown in 2012. The capital value appreciation, a key indicator of the sector's health, rose by a mere 1-3% across all major cities.
JLL India's Chairman Weighs In
The year 2012 was a sluggish one for the real estate sector, mirroring the country's overall economic growth, said Mr. Anuj Puri, Chairman and Country Head, JLL India. He attributed this slowdown to high interest rates and poor industrial production, which adversely affected investor sentiment and, in turn, the entire real estate market.
Residential Unit Deliveries: A Mixed Bag
- A total of 1,60,622 residential units were delivered in 2012 across the top seven cities, marking a slight increase from 2011's 1,54,701 units.
- These deliveries were concentrated in cities like Delhi-NCR, Bangalore, Mumbai, Kolkata, Hyderabad, Chennai, and Pune.
City-Wise Capital Value Appreciation
- Delhi-NCR and Pune led the pack with the highest rate of value appreciation.
- Hyderabad and Bangalore experienced slower value appreciation.
Demand and Supply Dynamics
- Despite a slight increase in demand, particularly during the festive season, the supply of unsold residential projects remained high.
- Real estate developers resorted to price reductions and innovative marketing strategies to clear their inventories. However, these efforts failed to boost price appreciation in any of the top cities.
Expert Insights
- Despite these efforts, there is still no improved price appreciation in any of the top cities in India, clarified Mr. Puri, highlighting the sector's ongoing challenges.