Launch activity has taken a breather at the margin across markets, after a fairly active 1H. This trend is expected to continue as we enter a seasonally weak period and given the onset of monsoons.
Gurgaon witnessed the successful launch of DLF’s golf course project (250 units sold in few days of launch). It has additional luxury project planned around Golf Course post September. Bangalore/Chennai continue to witness healthy sales momentum, aided by NRI demand given sharp rupee depreciation. However, we
expect the activity to moderate over the next few months.
Anecdotal evidence shows, unsold inventory up to 8 qtrs is manageable. As per JLL data, unsold inventory across major cities stood at Mumbai (12 qtrs), Bangalore (8.5 qtrs) and Gurgaon (3 qtrs) as of 2QCY13. Gurgaon is low ‘cause of high investor demand. We expect inventory figures to worsen in 3QCY13.
Overall absorption is marginally down on Q/Q with Mumbai, G Noida and Bangalore registering a positive trend. This was however offset to some extent by moderation in absorption in Gurgaon and Chennai.
Gurgaon has seen spot prices fall by 10% as investorsstarted to panic. Forward prices (primary mkt) has softened in Mumbai (down 10-15%); started to weaken in Gurgaon (down 5-7%) and flattish in Bangalore.
Unsold inventory is rising slowly as there is no improvement in absorption trends. Deliveries are expected to
see significant scale up over the next few Qs with large project completions across key cities. This could shift some activity to the secondary market.
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