Developers in certain micro markets of metros like Delhi-NCR, Mumbai and Bengaluru witnessed a drop of 4-20 per cent in launch prices of residential projects in 2015 over the previous two years, according to a report by property consultant Cushman & Wakefield.
The report has compared the launch prices of 2015 in the mentioned key micro markets with average weighted basic sale price over the last 2 years.
The report tracks the development activities in locations of Dwarka Expressway, New Gurgaon Southern Peripheral Road Sohna, Noida Expressway and Noida Extension in NCR, Thane, Goregaon and Malad in Greater Mumbai, and south-west and southern sub-markets in Bengaluru.
Mumbai’s suburban area, Goregaon witnessed the biggest decline, where the per square ft rate averaged at Rs 10,500 in 2015, a decline of 20 per cent in Average Weighted Basic Sale Price.
Mumbai’s other sub-urban area Thane is second in the list and witnessed a decline of 18 per cent in the launch price. The financial capital itself witnessed a 37 per cent decline in residential unit launches to 15,735 units, from the corresponding period last year with Mulund, Thane, Goregaon and Malad accounting for nearly 51 per cent of total launches during 2015.
The report further says that new launches in 2015 have been smaller in configuration therefore with reduced base selling prices and smaller units, the ticket size (cost per apartment) has also seen a decline in these key markets.
The submarket of Malad witnessed ticket size reduction by 15 per cent despite average launch prices (mid segment) declining by only 8 per cent primarily due to significantly reduced average unit sizes. Thane and Goregaon witnessed a decline in Average Weighted Basic Sale Price by 18 per cent – 20 per cent as well as reduced ticket size of new projects in 2015 compared to 2013.
Delhi-NCR witnessed launches of 23,000 units in 2015, out of which 79 per cent were launched in the locations of Dwarka Expressway, New Gurgaon Southern Peripheral Road Sohna, Noida Expressway and Noida Extension in NCR. Half of the total new launches in 2015 were in the mid-segment, the report said.
In a bid to attract buyers, developers have tried to bring down the ticket size of their offerings by either reducing unit sizes or reducing capital values or both. Such efforts from developers have been witnessed across submarkets especially in Southern Peripheral Road, New Gurgaon and Noida. Dwarka Expressway and Southern Peripheral Road saw the largest decline in launch prices in NCR of 10 per cent as against 2013 in Base Selling Price.
Most of the submarkets in Bengaluru witnessed steady launch prices except in far south and western submarkets where average new launch prices in 2015 declined by 2-7 per cent compared to 2013.
BW Reporters
The author is Senior Correspondent with BW Businessworld
