The National Capital Region (NCR) witnessed the launch of approximately 7,600 residential units in the first quarter of 2013, a decline of 39 per cent compared to the previous quarter. The new launches were concentrated in the suburban locations of Gurgaon (66 per cent) and Noida (34 per cent) with over 80 per cent of units catering to the mid-range segment.
Due to the subdued demand, Noida witnessed a steep decline in new launches at close to 70 per cent and ended up being the primary contributor for the overall decline in number of launches in the NCR. In addition, the new projects in Gurgaon were located primarily along Dwarka Expressway and in New Gurgaon, according to a recent report by Cushman and Wakefield.
The report says that an estimated 38,000 residential units were launched by organised developers in the first quarter of 2013 in major cities registering a marginal decline of approximately 2 per cent over the previous quarter. Of all the cities, Bangalore recorded the highest number of launches in Q1 2013 at 11,622 units contributing close to 31 per cent of the overall new supply in the top eight cities followed by NCR and Mumbai. Most locations in Delhi witnessed stable capital values in both mid and high-end segments. However, capital values in high-end segment in South Central Delhi witnessed 15 per cent appreciation over last year due to limited supply and high demand.
Among the suburban locations, Gurgaon noted higher appreciation due to the high demand from both end-users.
Shveta Jain, executive director (Residential Services) Cushman & Wakefield said the country’s residential market witnessed some vibrant launch activity during the quarter despite the sluggish economic environment. However, funding will remain a major challenge for developers while executing these projects. Given the rise in construction cost, cost of land and funding no major price cuts have been possible in the current subdued business environment. Developers are now following different strategies like selling smaller configurations at lower overall prices to boost sales.
Mumbai witnessed close to 7,200 units launched during the first quarter of 2013 but saw a marginal decline of 3 per cent compared to the last quarter of 2012. All major cities saw a decline in new launches compared to the previous quarter, except for Bangalore, Pune and Kolkata. The highest decline in units launched was witnessed in Hyderabad which saw an 89 per cent decline in number of launches during the quarter.
