The demand for residential space registered a meagre 1.8 per cent growth in Delhi in 2019, while the market is still struggling in Gurugram and Noida despite improving infrastructure and lower interest rates, a report has said.
Out of the 12 cities surveyed, 10 residential markets have shown positive market dynamics in the last quarter of the year, Magicbricks's PropIndex Report Q4 2019 said.
While some areas of the country faced downward pressure on prices and reduction in supply, searches remained robust in the affordable segment. The search trend suggests that India is looking for houses under Rs 4,000-5,000 per sq ft, it said.
"In Delhi, the demand has started to pick-up, but the options are limited. While the city prices remained low in the last 5 years, an increase of 1.8 per cent in the last one year indicates a positive development for the residential segment of the city. The residential demand in Gurugram has been dull. However, the city's improving infrastructure could boost demand," the realty portal's report said.
It further said that Noida and Greater Noida markets are struggling to pick-up despite demand matching supply, affordability, and lower interest rates.
While Noida's average prices fell by 10 per cent, Greater Noida witnessed an increase of just 3.6 per cent in the last 5 years.
The Credit Linked Subsidy Scheme (CLSS) under PMAY has led to increased buyer interest in the affordable and lower-mid segment. Emerging localities in the price bracket of Rs 4,000-5,000/sq ft observed the highest consumer interest.
The premium segment witnessed price declines in most tier-1 cities, as above Rs 10,000 per sq ft buyers looked for negotiated deals.
The segments of Rs 2-3 million, Rs 3-4 million and Rs 4-5 million each accounted for 10 per cent of the searches at the India level, the report said.
Magicbricks CEO Sudhir Pai said, "The findings indicate that consumer searches have remained robust in the affordable segment. While some areas of the country faced downward pressure on prices and reduction in supply, the search trend suggests that India is looking for houses under Rs 5,000/sq ft, making up a significant 40 per cent of the searches on Magicbricks."
In most of the cities, supply-managed to keep pace with the demand.
"The highlight, however, is the south India market that continued to resist recessionary pressures, with prices appreciating in all three cities of Hyderabad, Chennai and Bengaluru," Pai added.
PropIndex also suggests that south Indian cities are doing commercially well and gathering pace due to infrastructure and connectivity with the main employment hubs.
Bengaluruhas shown steady growth in the residential market, with a strong 25 per cent growth in the last 5 years.
Hyderabadobserved a consistent upward trend in prices, which rose by 3.8 per cent from Rs 5,400 per sq ft in July-September 2019 to Rs 5,600 per sq ft in October-December 2019.
The demand started to pick up inChennai in the last one year, with prices moving in tandem, rising a moderate 5 per cent year-on-year
Big ticket infrastructure projects are driving the real estate activity inNavi Mumbaimarket, which unlike the rest of the country, has given an impressive 21 per cent return in the last 5 years
In Thane, prices grew by a moderate 6.8 per cent in the last 5 years, with a 1.1 per cent quarter-on-quarter growth.
While investors remained at bay in Pune, end-users dominated the market, preferring established localities. The slow but steady rise in the city's prices came to a halt this quarter though, witnessing a marginal decline of 0.6 per cent quarter-on-quarter.
In Kolkata, despite the decrease in active listings and consumer searches, the city price index rose 2.1 per cent during the quarter, indicating a revival of the residential market, the report said.
Demand in Ahmedabad has started moving towards the peripheral areas. Benefiting from a lower base, the city's prices grew by a decent 6.9 per cent year-on-year.
"The industry can recover from the liquidity crisis, as more trusted developers are dominating new supply and big-ticket projects like metros and roads are encouraging the sales volumes in the peripheral areas," the Magicbricks report added.