Positive trend has been witnessed in the Indian economy. Cities like Bengaluru, Chennai and Pune witnessed healthy kick start for prime and mid-range properties however cities like Gurgaon, NOIDA and Mumbai saw a decline or steady trend due to slow movement of inventory during the quarter, said Colliers International in its India Residential Overview and Forecast Report.
Bengaluru remained the most active city in terms of new launches. Project launched by prominent builders had received a good response, with 30 - 40% of units launched being sold in the primary market. Most of the demand was held by end users and investors and for the mid-range properties. The steadily growing interest in newly launched projects is an indication of increased long-term investor participation in the Bengaluru real estate market.
Similarly, in Pune the demand from both end user and investors precisely in the mid-range segment kept the overall residential market positive. Majority of the demand was observed in projects located in micro markets such as Wagholi, Kharadi and Undri, Pisoli, Hinjewadi, Baner and Bavdhan.
Going ahead Pune residential market will continue to gain momentum. Micro-markets located in South East, North West and South West zones of Pune will remain active in terms of project completion and new launches. Overall, capital and rental values are expected increase in medium term. However, select micro-markets located in Central and North East will see a stable scenario.
The demand for prime residential has changed vividly over the 5-6 years. Delhi, Chennai, Bengaluru, Kolkata continued to have location-specific premiums, which is rising consistently. Boat Club Road in Chennai, M G Road in Bengaluru, Lutyens Zone in Delhi and Ballygunge in Kolkata witnessed the consistent demand, while Cuffe Parade, Marine Drive, Pedder Road and other premium locations in Mumbai had witnessed a slowdown in demand and price appreciation.
"Overall economic sentiment is turning positive and investors are motivated. Investor money has started chasing real estate investment opportunities. With inflation taming down and RBI reducing policy rate we see a further reduction in home loan rates which will help motivate end-users to invest in residential market. Looking forward, a continuation of this trend will fuel top-level pricing in the Indian gateway cities and will push more buyers into the opportunistic and value-added space in cities like Bengaluru, Pune and Chennai etc." said Sumit Jain, National Director, Residential Services.
The report anticipates a stable price scenario in most of the cities in near term as supply is complementing the demand in almost all the markets. However, with an overall uplift in market sentiments buyers who were delaying their decisions will start making a move which will resulted in improvement in overall absorption. However, rents are expected to remain stagnant in almost all the cities except few premium mature locations where supply is limited.
