Residential Price Rise Not Good

You've got to love this because the Real Estate Residential market has become so sensitive to price rise that volumes and registrations tell us the consumer behavior in this market. It is evident from what Anuj Puri of Jones Lang Lasalle Meghraj India said,

Residential volumes have come down by 25-30% Q/Q in 4Q09 given an increase in prices. Volume moderation has primarily happened in mid market (Rs 3-8MM), however, affordable (<>Rs 10MM) segments continue to do well. Going ahead, JLLM expects the volumes to stabilize at current levels, implying that the best may now be behind us.

It also tells us that Speculators are out of the Real Estate Market and the biggest non-essential player left is the Muscle Powered Goons :-)

The service tax burden (3.3% of sales value for new sales) is likely to be passed on to end users, thereby pushing up rents/prices.

Tier 2/3 cities seem to losing their sheen as incrementally office/retail demand is shifting to tier 1 cities (Hyderabad/Chennai) as rentals become relatively affordable in metros and tier 1 areas.