Performance of Residential Real Estate in Top Indian Cities
The residential real estate market in the first six months of 2016 has shown promising trends in eight major Indian cities: Mumbai, NCR, Chennai, Pune, Hyderabad, Ahmedabad, and Bengaluru. Prices have remained steady, sales have increased, and unsold inventory has decreased over the last two years.
Unsold Inventory Statistics
- According to Knight Frank India, 6.6 lakh residential units remained unsold between January and June 2016, marking a 7% year-on-year drop.
- In the same period in 2015, these cities noted 7.10 lakh unsold units.
- Chennai, Pune, Mumbai, and Hyderabad have led the devaluation of inventory.
Regional Trends
NCR: Worst Performing Market
- NCR continues to struggle as one of the worst-performing real estate markets in India, with a significant unsold inventory and high Quarter to Sell (QTS).
- It recorded over 2 lakh unsold units, taking over 4.5 years to sell.
Mumbai: Moderate Improvement
- Mumbai saw a reduction from approximately 1.95 lakh units to 1.70 lakh units, taking around 2.5 years to sell.
Pune and Bengaluru: Best Performing Cities
- Pune and Bengaluru were the best-performing cities with the lowest quarter to sell.
New Residential Launches
- New residential launches hit a three-year low, declining by 9% year-on-year to 1.07 lakh units.
- This trend was primarily driven by the NCR region, which witnessed a sharp 41% fall in new launches.
- Pune and Chennai followed with declines of 32% and 36% respectively.
- Mumbai, however, reported a surprising rise in new launches, increasing by 29% year-on-year.
Sales Trends
- Sales across the top eight cities increased by 7% year-on-year, with approximately 1.35 lakh units sold in the first six months of 2016.
- Bengaluru and Mumbai led this growth with positive sales volumes, increasing by 18% and 23% respectively.
- NCR, Kolkata, and Chennai continued to face challenges in sales volume.