Knight Frank expects residential sales expected to grow 26 per cent in second half of year in the six metro cities of Mumbai, National Capital Region (NCR), Bengaluru, Pune and Chennai and Hyderabad.
Residential property sales in India have remained sluggish over the past year amid slowing economic growth, high interest rates and high inflation, among others. But analysts see sales volume picking up in the second half of this year (July-December).
The election results, sops for the housing sector in the Union Budget and optimism about economic recovery seem to have changed the home buyers' sentiment from negative to positive in the last three months, says Knight Frank, a property asset management firm, in a report.
Dr Samantak Das, chief economist & director of research at Knight Frank, says improved consumer sentiment has helped in more buyers enquiring about property purchases. "The likelihood of queries getting translated into demand is also very high. The optimism is translating slowly into reality," he says.
Knight Frank expects residential sales expected to grow 26 per cent in second half of year in the six metro cities of Mumbai, National Capital Region (NCR), Bengaluru, Pune and Chennai and Hyderabad. According to its estimates, sales volume fell 27 per cent in these cities during the first half of this year (January-June).
For buyers, the good part is that property prices have not gone up much in major cities and property sale negotiations are still skewed towards buyers, particularly in Delhi NCR, says Mr Das. Besides developers are giving various sops like registration waivers etc, he adds.
Mumbai and Bangalore are expected to lead in the recovery of sales volume, with 49 per cent and 26 per cent growth respectively, during July to December, 2014.
During H1 of 2014 (January to June), residential property prices inBangalore appreciated at the fastest pace of 11 per cent, followed by 9 per cent in Hyderabad.
Prices in Hyderabad seem to be finally catching up with the other cities as the political uncertainty regarding the decision of dividing the state of Andhra Pradesh has ended.
Going forward, Mumbai is expected to lead in terms of price appreciation during H2 of 2014 (July-December), with year-on-year price appreciation of around 10 per cent.
Pune emerged as the most affordable city during H1 of 2014 (January-December), as 83 per cent of the new launches were below the ticket size of Rs. 50 lakh. Similarly, 75 per cent and 62 per cent of the new launches in Chennai and NCR respectively were below the ticket size of Rs. 50 lakh.
Mumbai has emerged as the most premium market, with 34 per cent of the total launches during January-June above the ticket size of Rs. 1crore.
Bangalore: The weighted average residential price in Bangalore has increased by 11 per cent from Rs. 4,020/sq ft in H1 2013 to 4,473/sq ft in H1 2014. Going forward, it forecasts the prices to increase nominally, by 1.5 per cent in H2 2014 to Rs. 4540/sq ft, compared to H1 2014.
Hyderabad: The weighted average asking prices here grew by approximately by 2.2 per cent in H1 of 2014, compared to H2 of 2013.
Chennai: The weighted average price is forecast to increase by 3 per cent by the end of 2014 against the 5 per cent increase witnessed in H1 2014.
NCR: Knight Frank forecasts the weighted average price to increase by 2 per cent in H2 of 2014 to Rs. 4,500 per sq ft.
Pune: The weighted average residential price in Pune has increased by 6 per cent from Rs. 4,350/sq ft in H1 of 2013 to Rs.4,600/sq ft in H1 of 2014. Going forward, Knight Frank forecasts the prices to increase by 4 per cent in H2 2014 to Rs. 4,700/sq ft.
While the debate on the pros and cons of locating the capital city between Vijayawada and Guntur cities intensifies, the entry of unscrupulous elements into the scene has become a major cause for concern for the persons who have purchased the plots and land in this area.