1QCY13 saw slowdown in new launches but demand remained steady averaging 11,500 units per qtr for FY13. We believe the residential market in Noida is witnessing polarization wherein certain developers are launching and selling well such as 3C, Mahagun, Jaypee, ATS etc. whereas many others continue to struggle in terms of sales, approvals and execution. We reiterate that timely execution will be the differentiating factor in Noida in near future.
Despite being the most affordable city among tier I cities, Noida’s absorption rate has remained subdued and unsold inventory continues to rise since year 2010. We attribute this trend entirely to flurry of new launches in year 2010 followed by farmer land unrest in 2011 leading to poor execution and tepid price appreciation.
Thus investors fled the market. Market dynamics in Greater Noida is even worse compared to Noida. We maintain a –ve outlook on Noida/ Greater Noida as we believe developers will struggle more in terms of timely execution than sales.
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