New project launches in India’s nine key residential markets continued to show a decline, falling 44 per cent year-on-year in the period between October and December 2019, primarily on liquidity concerns.
While, on the other side the commercial real estate market of India in the year 2019 has seen increased investor focus. With the prices in the residential market stagnating, commercial properties have been lucrative because of the returns they offer.
Atleast the “Real insight Q3FY20”, a quarterly analysis of India’s nine key property markets by PropTiger DataLabs says so.
A lot of developers are now targeting the small retail investor who does not have the appetite to purchase large commercial offices and are therefore developing commercial projects that offer 350-1000 sq. ft. offices. A commercial asset today offers 1-2% more yield yearly than a residential asset.
Sales fell across cities
Housing sales in India’s nine key property markets fell 30 per cent annually during the October-December quarter despite the government launching several measures in the recent past to revive buyer sentiment.
Talking about Ahmedabad, the city observed a double-digit dip in total number of units sold. There was a decrease of 14% in the growth of units sold when compared Quarter 3 on Year-on-Year basis and 8% decrease in Quarter to Quarter comparison.
Most of the new launches in most of the cities of India, couldn’t live up to the expectations. Kolkata and Gurugram saw almost 74-79% slump in the new launches.
The only launches which were successful were affordable launches. But, more than half of them came from Mumbai alone.
Marginal price appreciation
Average values of property increased by 13% year-over-year in Hyderabad, the highest increase among all the cities included in the report, while Gurugram and Ahmedabad registered 6% and 5% increase, respectively.
In other cities, prices showed only nominal increases, between one and three per cent.