Sunday, 29 January 2012
Realty Trends: India
Prices in all markets are a
function of demand and supply and the developments in the real estate industry
during year 2011 is the latest example. Demand for real estate is a derived
demand and thus the state of economy has a direct impact on this sector; be it
Residential, Commercial or Retail.
The pace of new project launches
has severely been crippled in 2011. During 2010, 3,61,098 residential units
were launched across the top 7 cities of Mumbai, NCR, Pune, Kolkata, Bangalore,
Chennai and Hyderabad. However, in 2011 only 1,72,856 units were launched. This
is a decline of 52% from the last year. Moreover, of the total housing
inventory pertaining to the under construction projects, 39% or 3,06,859 units
are lying unsold. A substantial portion of this unsold inventory belongs to the
NCR market.
The inventory levels (Residential
Units) in all major cities in 2011 saw relatively higher levels than in the
previous year. Commercial office space demand, which is driven mainly by the
service sector industries like BFSI and IT/ITES, remained muted in 2011.
Rentals in the top 7 cities remained under pressure as corporates trimmed
hiring plans resulting in to reduced office space requirement. Of the total
office stock of 367mn.sq.ft. in these
cities, 24% or almost 89 mn.sq.ft. remains vacant. NCR, Pune, Chennai and
Kolkata have a high proportion of vacant stock followed by Mumbai and
Bangalore.
To be continued....
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