Hike In Prices Shows Property Markets Picking Up In Southern Cities
Experts have been pointing out that a huge inventory overhang is the most significant issue ailing India's real estate sector and things could look up only if this pile is cleared. As far as property markets in the south are concerned, developers seem to be making all efforts in that direction. Data show new launches in southern cities declined in June, as developers pushed to clear the unsold inventory. Prices of properties, on the other hand, registered a healthy annual growth, an indication that the recovery would be slow but steady.
According to PropTiger DataLabs report (Monthly Realty Watch: South India July'16), new launches in the southern region — Chennai, Bengaluru and Hyderabad — declined 46 per cent in June when compared to April. While Hyderabad saw the highest decline of 88 per cent month-on-month, Bengaluru witnessed a 42 per cent fall in new launches. This is indicative of these cities' attempt to clear the inventory before developers venture into new projects. Tamil Nadu capital Chennai, on the other hand, saw an 11 per cent increase in new launches and accounted for about 40 per cent of the total launches in the region.
Companies that launched projects in Bengaluru include Vaswani, LGCL, Meda Structures, Shravanthi, LVS Constructions, while Arun Excello, Casa Grande and BBCL launched projects in Chennai. Giridhari Developers launched its project in Hyderabad.
However, the southern cities saw a healthy appreciation in property prices. Residential localities across the three cities saw an annual price increase in the range of two per cent to 13 per cent. All prominent localities in India's information technology capital Bengaluru registered a price rise, with Hebbal perched on the top with a 13 per cent year-on-year price appreciation. Chennai's Sholinganallur and Hyderabad's Hitech City saw the highest annual price appreciation rate of eight per cent. While some localities in Chennai also saw a price drop (these include Oragadam, Poonamallee and Tambaram), prices in most localities of Hyderabad soared.