Residential launches down by 30% in 2012
In 2012, the residential market was disturbed by weak business sentiments, high property prices, high labour cost and relatively higher mortgage rates which resulted in the decline of 30% in 2012 in comparison to a plunge of 7% in 2011, said a real estate consultancy.
Real estate developers are really cautious of launching project as the gap between the launch and the absorption numbers reduced to 32,000 units in 2012 compared to 82,000 and 94,000 units in 2010 and 2011 respectively.
Knight Frank said the residential sales momentum for the top cities fell by 14% and 16% during 2011 and 2012 respectively. Banks’ credit exposure to developers has also fallen from its peak growth rate of 23.21 % in June 2011 to 3.88 percent in September 2012.
According to the report, NCR will see increase in supply due to the opening up of new sectors in Noida, Gurgaon and Greater Noida and is also expected that in 2013, the NCR residential market will remain stable.
Mumbai residential market will continue to suffer from low sales volume but rise in property prices will dampen the increasing share of peripheral markets. Pune is expected to see maximum traction in the residential space. Bangalore real estate is likely to see a steady supply of new houses with stable absorption. Additionally, the property prices will remain stagnant as the supply overhang decreases.
Total absorption among the top 6 cities is shown in the pie chart below.
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