‘Realty markets in South outdo northern, western counterparts’

‘Limiting new ventures, focus on delayed projects helped’

Chennai, 08-10-2013: A series of high-rise residential complex undergoing construction is seen in the outskirts, south of Chennai. Indian business groups warned recently that a Land Reform Bill passed by the Lower House of Parliament could jeopardise investment that is desperately needed to kick-start the stuttering economy. The contentious Land Acquisition Bill is intended to give farmers fairer compensation for their land sought for development, and replace a 119-year-old law framed by India's British colonial former rulers. Photo:S_R_Raghunathan

Realty markets in the South have done relatively well as compared with rest of India’s key markets on account of limiting new projects, focus on completion of delayed ones, and designing projects that met consumer demand, analysts said.

This approach has been in contrast to most markets, where developers are confronted with massive inventory pile-ups, as opposed to the situation in the southern markets, they added.

“The three main Southern cities collectively have less unsold stock than their western and northern counterparts,” said Santhosh Kumar, vice chairman, Anarock Group.

For instance, Bengaluru, Chennai and Hyderabad together have a total unsold stock of nearly 1.57 lakh units as of Q3 2021-end, according to Anarock Research. This is approximately 24% of the total unsold stock (of more than 6.55 lakh units) across the top 7 cities.

In contrast, in the north, Delhi-NCR has more unsold stock of 1.67 lakh units (which is 25% of the overall share) while the western region including MMR and Pune have more than 2.9 lakh unsold units as of Q3 2021-end, which is 44% of the total unsold stock.

“This clearly indicates that the southern markets are more in line with consumer demand and developers consciously continue to bridge the demand-supply gap,” Mr. Kumar said.

“The property markets in Delhi NCR, Mumbai and Pune failed to match the performance of Southern real estate markets as most projects there got stalled and delayed due to extensive lockdowns during the second COVID wave,” said Debayan Bhattacharya, Head – Primary Sales (South Zone), Square Yards.

A huge funding crunch and shortage of labour ensued thereafter which delayed construction for some months in the above markets. Ready-to-move and near-finished homes were mainly available in the luxury segment, and affordable and mid-segment homebuyers were not left with viable options, thus delaying their purchase, he said.

“Though new launches were prepped up in the subsequent months and demand drivers like stamp duty cuts, low interest rates, and stable property prices were in tow, sales was slow as homebuyers decided to wait till the property market weather became a bit sunnier,” he added.