Delhi NCR Realty Market once upon a time flooded with Speculators Money from the Corrupt Congress Government Politicians and their Coterie of IAS Officers is the Worst hit Real Estate market in India as the present Government has Zero Tolerance for Corruption. 80% of apartments in NCR is 3BHK and the average size of unit is almost 1400 sq ft+, so getting a sub 1Core property is impossible.
Worst hit market in India with prices are down by 30 to 50% in select cases. Secondary market is comparatively doing fine with some deals happening. This market is known to have lot of speculative investments from investors and NRI’s in last couple of years. The average time to complete a project here is 7 years and market is so illiquid that it takes around 1.5 to 2 years to sell the property.
Noida market is even worse as compared to Gurgaon with lot of inventories building up .The same is the case in tier 2 and tier 3 cities such as Kanpur, Patiala, Lucknow, Amritsar etc with no deals happening despite price cuts of 20-30%.
All small time developers are just trying to get hold on some funds so that they can restart the halted projects and liquidate the inventory. It is the only market where there is an explicit price cut due to loss of trust factor in developers because of developers like DLF diverting funds to build land banks than developing a project. This has lead to over delaying of project, denting consumers’ confidence.
In primary residential market, the situation is so bad that no deals have happened in last 1.5 years. Lot of small time developers are in such cash crunch condition that they were not paying contractor for last 1-2 years resulting into contractors have stopped working and abandoned sites. So lots of uncompleted projects can be seen in this region.
Thursday, October 01, 2015
Mumbai Residential Prices to remain sticky, time correction on the card
In the Mumbai residential space, number of new launches have declined to the extent of 15-20%. Newer launches are happening at lower price (not a market correction). Developers negotiate price depending on the cash paid at the time of booking.
Size of apartments has gone down by 20-25% in Mumbai. A 670 sq ft flat is very common for 2bhk compared to 750qft carpet area two years ago. Mumbai will remain strong because developers have mastered the art of supplying just about the right amount of properties.
Cycle has bottomed out in the commercial space and it is poised to do better going forward . Pick up in demand of commercial real estate is true for all the cities as absorption of space has climbed up. Newer launches are more aligned to what the markets need now. Ticket size has gone down.
Developers are working with much lower margins, input cost has gone up due to high labour costs.
In retail real estate, market is guided by supply rather than demand. Absorption is a function of quality and quantity of supply. Only a few players per city in this segment. The malls which flopped or are on the verge of shutting down because they were ill-planned. Consolidation will probably happen across developers. Weak developers who have financing issues might sell their stock to large, well-off developers. Block deals can happen in real estate too, a builder will sell it to another strong builder.
Online has impacted the business, especially in electronics. People come to Croma, check the model and order it online. But there are some activities which online can not cater to such as Movies, Food, entertainment .
Size of apartments has gone down by 20-25% in Mumbai. A 670 sq ft flat is very common for 2bhk compared to 750qft carpet area two years ago. Mumbai will remain strong because developers have mastered the art of supplying just about the right amount of properties.
Cycle has bottomed out in the commercial space and it is poised to do better going forward . Pick up in demand of commercial real estate is true for all the cities as absorption of space has climbed up. Newer launches are more aligned to what the markets need now. Ticket size has gone down.
Developers are working with much lower margins, input cost has gone up due to high labour costs.
In retail real estate, market is guided by supply rather than demand. Absorption is a function of quality and quantity of supply. Only a few players per city in this segment. The malls which flopped or are on the verge of shutting down because they were ill-planned. Consolidation will probably happen across developers. Weak developers who have financing issues might sell their stock to large, well-off developers. Block deals can happen in real estate too, a builder will sell it to another strong builder.
Online has impacted the business, especially in electronics. People come to Croma, check the model and order it online. But there are some activities which online can not cater to such as Movies, Food, entertainment .
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