India’s real estate industry is looking for a strong turnaround in 2017 as Magicbricks PropIndex, the flagship quarterly report, revealed a positive April-June 2017 quarter for the realty market as 55% of the 750 localities across 14 major cities witnessed an average price increment of 2.8%.
Magicbricks PropIndex for April-June quarter lifts the spirit of India’s real estate market after the Magicbricks PropIndex for Jan-March 2017 stated that the overall realty market scenario remained weak. The localities that witnessed an incremental price hike in the April-June quarter account for 52% of property searches and 54% of properties listed on Magicbricks, hence indicating a trend that important localities from both demand and supply perspective across India witnessed a price increase.
Magicbricks PropIndex also revealed encouraging signs of price increment in affordable and lower-mid segments that comprise 65% of the 750 localities. While 55% localities in affordable segment had price increment, it was 56% in the lower-mid segment. Of the 14 cities covered, nine cities on average had price increment across 60% localities in lower-mid segment. Marginal price movement in both these categories mark the return of consumer interest and transaction activity and also augurs well for the industry.
At city level, only three cities – Hyderabad, Chennai and Bangalore had a perceptible increment in weighted average price. Hyderabad realty market has been witnessing gradual price increment since early 2016 and this positive trend continues in Apr-Jun 2017 quarter. In fact, Hyderabad stands out amongst all the cities for its performance over last five quarters, with an increase of 10%. It was the highest price gain amongst 14 major cities for this period. In April-June 2017 quarter, Hyderabad saw the highest price increase of 2% across most localities spread across core, suburban and peripheral regions of the city.
Sudhir Pai, CEO, Magicbricks, said, “There is finally something to cheer for in our latest PropIndex for the April-June quarter. The fact that 55% of the localities witnessed an average price increment of 2.8% reflects that we are looking forward to a turnaround in India’s realty market. What was more interesting was that out of 14 cities nine cities on an average had price increment across 60% localities in lower-mid segment. Price increment in the lower-mid and affordable segments signals the return of consumer interests and transactional activity. This certainly augurs well for the real estate industry. Though we have witnessed the economy slowing down to 6.1 percent in Jan-March quarter, the revival in India’s real estate industry will certainly play a key role if we want to better last year’s GDP growth rate of 7.1 percent.”
Magicbricks PropIndex also stated that besides Hyderabad, Chennai and Bengaluru, price level in other cities were practically stagnant or witnessed minor variation. In North, Greater Noida had the highest quarterly price decline followed by Ghaziabad, Noida, Delhi and Gurgaon. Pune and Thane in western India had marginal price decline while other cities like Mumbai, Navi Mumbai and Ahmedabad either had marginal price increment or were stagnant.
In terms of budget segments, 63% premium localities across most cities had price decline. This was more prevalent in the north Indian cities of Delhi, Gurgaon and Noida, where more than 75% premium localities, had price decline. Premium segment in Pune as well witnessed price decline across more almost 67% localities.
PropIndex also stated positive price movement in the Under-Construction (UC) property segment. Price of UC properties across 61% localities was either stable or saw a marginal increment. In comparison, price of Ready-to-move (RM) properties declined in 47% localities and was stable in only 2% localities.
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