In the first quarter of 2016, the top six* cities witnessed the
infusion of nearly 19,000 new residential units. Of the total,
maximum launches were concentrated in Mumbai (34%),
Bengaluru (32%) and Pune (12%). Whilst developers across all
major cities steered clear of inundating the primary residential
segment with too many new products, recovering market
confidence prompted them to lure buyers with cash discounts
and freebies. As per Reserve Bank of India (RBI)’s new
directive, interest rates will have to be reviewed every month on
the basis of MCLR (marginal cost of lending rate) which is
expected to bode well for the buyers seeking home loans.
2. Going forward, steady enquiries, mainly in the affordable and
mid-segment is likely to bring back fence sitters. Capital and
rental values are expected to be rationalized in the near term as
residential markets across all major cities witness developers’
focus on clearing unsold inventory. Falling interest rates
coupled with the introduction of Real Estate (Regulation and
Development) Act, 2016 are expected to stimulate end user
demand and lead to market recovery.
INDICATORS Q4 2015 Q1 2016
QoQ %
CHANGE
Gold 25,014 29,080 16.25%
Silver 32,984 36,651 11.12%
Fixed Deposit² 7.75% 7.50% -3.23%
Equity – BSE 26,117 25,341 -2.97%
S&P BSE Realty Index³ 1,344 1,228 -8.63%
Return on Alternative Investments
Research &
Forecast Report
INDIA | RESIDENTIAL
April 2016
¹SBI home loan rate for loan up to INR 30 lakhs
²SBI fixed deposit rate for a period of more than one year & amount below INR 1 crore
³S& P BSE Realty index is a free float weighted index, comprised of real estate
development companies in BSE – 500 Index
*Mumbai, Pune, Bengaluru, Chennai, Gurgaon and Noida
Source: Government of India, Colliers International India Research
Moderate influx of
new launches in
major cities
In the first quarter of 2016, the top six* cities witnessed the
infusion of nearly 19,000 new residential units. Of the total,
maximum launches were concentrated in Mumbai (34%),
Bengaluru (32%) and Pune (12%). Whilst developers across all
major cities steered clear of inundating the primary residential
segment with too many new products, recovering market
confidence prompted them to lure buyers with cash discounts
and freebies. As per Reserve Bank of India (RBI)’s new
directive, interest rates will have to be reviewed every month on
the basis of MCLR (marginal cost of lending rate) which is
expected to bode well for the buyers seeking home loans.
Source: Government of India, MOSPI, RBI Colliers International India
Research
INDICATORS Q4 2015 Q1 2016
Repo Rate 6.75% 6.75%
Cash Reserve Ratio 4.00% 4.00%
CPI Based Inflation 5.61% 4.83%
Home Loan Rate¹ 9.70% - 10.00% 9.30% - 9.60%
Economic Barometers
Economic Indicators
Source: Government of India, Colliers International India Research
Colliers View
3. The first quarter of 2016 witnessed an increased traction
in the primary residential sales market specially in the
projects where developers were offering flexi payment
plans and competitive pricing. About 6,500 new
residential units were launched in this quarter.
Interestingly, a number of projects were launched in
Central and Western suburb locations such as Chembur,
Byculla, BKC, Goregaon, Malad in Q1 2016. Most of
these projects were launched in the price range of INR
15,000 per sq ft to 25,000 per sq ft. Beside this, a few mid
segment projects in the price range of INR 7,500 to
8,000 per sq ft were also launched in Thane.
Secondary residential market maintained a status quo
and not many transactions were concluded during the
quarter.
Whilst, a marginal appreciation of 1 to 2% in capital
values was witnessed in select locations such as Santa
Cruz, Powai, Khar and Bandra, capital values in almost
all other micro markets remained stable. Rental values in
the luxury segment remained stable. However, micro
Residential sector
witnessed improved
sentiments in Q1
2016
About 6,500 new residential units
launched in Q1 2016
Market Indicators
Relative to prior period 2015 2015 2016 2016F
CapitalRate
New Projects
Construction
Rental Rate
MICRO MARKETS
CAPITAL VALUES
(INR PSF)
% CHANGE
QoQ YoY
South Mumbai 48,000-69,000 0% 3%
Worli 48,000-58,000 0% 3%
Prabhadevi 46,000-55,000 -1% -2%
Bandra 34,000-47,000 1% 1%
Khar 27,000-34,000 2% 2%
Juhu 27,000-31,000 0% 4%
Santa Cruz 24,500-28,500 2% 4%
Powai 21,000-27,000 2% 12%
Andheri 19,000-23,000 0% 5%
Market Trends
Note: Above values represents indicative asking price for premium properties
Only secondary market products capital values mentioned
*Represents base selling price
Research &
Forecast Report
MUMBAI | RESIDENTIAL
April 2016
Source: Colliers International India Research
Source: Colliers International India Research
Market Q3 Market Q4 Market Q1 Market Q2
5. Gurgaon’s residential market continued to maintain status
quo in terms of demand. Sales in the primary market
remained weak from the last six consecutive quarters. The
tepid response for the soft launch projects resulted in
minimal new project launch in the market in Q1 2016. The
new project that came or sale in the market includes high
end project ‘La Vida’ in sector 113 by Tata Housing at a
basic selling price of INR 8,500 per sq ft and mid segment
projects like Bestech Park View Altura in sector 79 by The
Bestech ParkView Altura Company; The Turning Point in
sector 88B by Vatika at base selling price of 5,130 per sq ft.
In the secondary market, the demand was primarily driven
by end users. The number of enquiries have increased for
ready to move in properties in micro markets such as Golf
Course Extension Road and Sohna Road, however, it has
not translated in increase in transaction volumes from the
previous quarter. Dwarka Expressway and New Gurgaon
sectors continued to receive lukewarm response from end
users even for the completed projects due to lack of social
amenities and connectivity.
Capital values remained stagnant in almost all the micro
markets, however, project specific discounts were available
Residential market
maintained status
quo
Minimal new launches; gap between
primary and secondary market prices
all time low
Market Indicators
Relative to prior period 2015 2015 2016 2016F
Market Q3 Market Q4 Market Q1 Market Q2
CapitalValue
New Projects
Projects
Completion
MICRO MARKETS
CAPITAL VALUES
(INR PSF)
% CHANGE
QoQ YoY
Golf Course Road 11,000 - 36,000 0% 2%
Sushant Lok 12,000 - 18,000 -8% -3%
DLF Phase I 11,000 - 13,000 0% 4%
NH-8 10,500 - 18,000 2% 10%
Sohna Road & Ext 6,000 - 11,000 -3% 0%
Market Trends
Note: Above values represents indicative asking price for premium properties
Research &
Forecast Report
Gurgaon | RESIDENTIAL
April 2016
Source: Colliers International India Research
Source: Colliers International India Research
RentalValue
7. NOIDA’s residential market remained stagnant in Q1
2016 with minimal new launches. The focus of the
developers remained on completion of under-construction
projects. A number of projects witnessed phase wise
completion along NOIDA – Greater NOIDA expressway
and sector 72 to 78. In the last two quarters, the NOIDA
Authority has issued completion certificates for more than
35 projects. For these projects, there was a massive drive
to register the property by 31March ,2016 due to
expected increase in stamp duty value.
Although much delayed projects are being delivered in a
trickle, only those that have been delivered with decent
construction quality have seen significant occupancy by
owner-occupiers or by tenants. Such developments were
commanding a premium of nearly 20% over comparable
under construction developments in the vicinity.
The supply of new deliveries has put downward pressure
on rental values in existing mature markets such as
sector 61 to 63 and sector 92 – 93 cluster. The average
capital values remained stable both in primary and
secondary sales market during the quarter.
.
NOIDA witnessed a
number of
completions in Q1
2016
New launches continue to shrink to
rock bottom level
Market Indicators
Relative to prior period 2015 2015 2016 2016F
Market Q3 Market Q4 Market Q1 Market Q2
CapitalValue
New Projects
Projects
Completion
MICRO MARKETS
CAPITAL VALUES
(INR PSF)
% CHANGE
QoQ YoY
Sector 44 9,400 – 10,000 -3% -3%
Sector 92,93 7,700 – 8,300 -11% -7%
Sector 50 7,000 – 7,600 -1% -1%
Sector 61,62,63 5,900 – 6,400 -1% -1%
Sector 28,29,30 5,500 – 5,900 -1% 0%
Sector 100 to 110 5,000 – 7,000 0% 2%
Sector 70 to 79 3,600 – 5,500 0% 2%
Market Trends
Note: Above values represents indicative asking price for premium properties
Only secondary market products capital values mentioned
*Represents base selling price
Research &
Forecast Report
NOIDA | RESIDENTIAL
April 2016
Source: Colliers International India Research
Source: Colliers International India Research
RentalValue
9. During the first quarter of 2016, Chennai’s residential
property market witnessed a 9% dip in new launches
over the previous quarter. Nearly 1,100 new units were
launched during this period, out of which 10% were in soft
launch stage. This dip is attributed to both low recovery in
property markets in the aftermath of floods from a few
months back, as well as delay in approvals owing to
model code of conduct in the wake of upcoming state
elections. Developers maintained a wait and watch
approach as they focused on completion of stalled
projects amidst low sales velocity.
Of the total units launched, mid segment dominated the
launches with an 84% share whilst the rest were
concentrated between high-end and luxury segments.
Perumbakkam, a prominent suburb in the southern part
of the city witnessed the launch of nearly 68% units,
followed by Santhome with a 16% share. Other locations
which witnessed new launches included T. Nagar and
Thiruvanmiyur. Prominent builders that launched projects
during this period included Radiance Developers,
Ceebros, Olympia Group and Shanthi Builders in
locations such as Thiruvanmiyur and Teynampet.
New launches
remain muted in
Chennai
Chennai grapples with low residential
demand during the first quarter of
2016
Market Indicators
Relative to prior period 2015 2015 2016 2016F
CapitalRate
New Projects
Construction
Rental Rate
MICRO MARKETS
CAPITAL VALUES
(INR PSF)
% CHANGE
QoQ YoY
Boat Club 26,000–35,000 0% 0%
Nungambakkam 19,000-26,000 0% -15%
Alwarpet / R A Puram 18,500-26,000 0% -3%
Beasant Nagar 13,500-17,500 0% -2%
Adyar 13,000-17,000 0% -9%
Anna Nagar 13,500-17,000 0% 3%
T Nagar 12,500-20,000 0% 0%
Velachery 7,000-10,000 0% 10%
Sholinganallur 4,800-5,950 0% -3%
Siruseri/ Kazipattur 4,000-6,500 0% 0%
Market Trends
Note: Above values represents indicative asking price for premium properties
Only secondary market products capital values mentioned
*Represents base selling price
Research &
Forecast Report
CHENNAI | RESIDENTIAL
April 2016
Source: Colliers International India Research
Source: Colliers International India Research
Market Q3 Market Q4 Market Q1 Market Q2
11. Bengaluru’s residential property market witnessed the
launch of nearly 6,000 new residential units in the first
quarter of 2016. This represents a quarterly increase of
26% over the previous quarter, even though developers
are concentrating efforts on completing under
construction projects in an oversupplied market.
Of the total launches in this quarter, nearly 18% were
currently in the soft launch stages. Eastern (52%) and
northern (34%) regions witnessed the maximum number
of new launches, mainly in locations such as Devanahalli,
Yelhanka-Doddaballapur Road and Harlur. Other
emerging locations such as Varthur and Off Yemalur
Road in the eastern quadrant witnessed the launch of
high rise projects in apartment formats by reputed
builders such as Prestige Developers and Sobha
Developers, amongst others.
Almost all units launched in this quarter catered to the
mid segment category signaling developers’ focus on
introducing products keeping in mind end-users’
affordability and preferences. Similarly, this quarter did
not witness the launch of villa projects and the entire new
launches were in high-rise apartment complexes format.
Uptrend in new
launches in Q1
2016
Northern and Eastern quadrant
remain hotspots for future supply
Market Indicators
Relative to prior period 2015 2015 2016 2016F
CapitalRate
New Projects
Construction
Rental Rate
MICRO MARKETS
CAPITAL VALUES
(INR PSF)
% CHANGE
QoQ YoY
Central 20,000-30,000 0% 4%
Cooke Town 7,500-14,000 0% -7%
Jayanagar 8,500-10,500 0% 6%
Sadashivanagar (Palace
Orchards)
9,000-15,000 0% 0%
Airport Road 8,500-11,000 0% 8%
Indiranagar 8,000-12,000 0% 0%
Bannerghatta Road 4,500-8,500 0% 0%
Koramangala 6,500-10,500 0% 3%
Whitefield 4,200-8,500 0% 0%
Yelahanka 4,000-10,000 0% -3%
Market Trends
Note: Above values represents indicative asking price for premium properties
Only secondary market products capital values mentioned
*Represents base selling price
Research &
Forecast Report
BENGALURU | RESIDENTIAL
April 2016
Source: Colliers International India Research
Source: Colliers International India Research
Market Q3 Market Q4 Market Q1 Market Q2
13. Pune’s residential property market witnessed the launch
of more than 2,200 new units during this quarter. All the
new units launched catered primarily to the mid segment
and were concentrated in eastern and western quadrants
of the city due to consistent demand from IT-ITeS
workforce and the city’s manufacturing sector base.
Proximity to other IT-ITeS hubs in the vicinity and future
capital value appreciation is also an added advantage for
developers to introduce launch in these micro markets.
Developers such as Godrej Properties, Purvankara
Projects Ltd. and Kotle Patil Developers were amongst
those who introduced new products in the market.
Prominent completions included projects from builders
such as Mittal Brothers, Nyati Developers and Mantra
Properties. All the new project completions were
attributed to the mid segment and augmented supply in
locations such as Balewadi, Tathawade, NIBM and
Wagholi.
Capital values maintained status quo during this quarter,
however, rental values in some micro markets such as
Magarpatta, Hadapsar, Deccan and Camp registered a
High inventory in
residential segment
curtails new
launches
Steady demand in affordable segment
in eastern and western suburbs
Market Indicators
Relative to prior period 2015 2015 2016 2016F
CapitalRate
New Projects
Construction
Rental Rate
MICRO MARKETS
CAPITAL VALUES*
(INR PSF)
% CHANGE
QoQ YoY
Deccan/Camp/Boat Club 7,000-15,000 0% -8%
Kalyani Nagar/Viman
Nagar/Kharadi
5,800-16,500 0% -2%
Baner/Hinjewadi/
Wakad/Pashan
4,800-9,500 0% 0%
Magarpatta/Hadapsar 4,800-7,800 0% 0%
Kothrud/Bavdhan/Wajre 6,200-12,000 0% 0%
NIBM/Undri/Kondhwa 4,400-6,250 0% -8%
Pimpri/Chinchwad/Chakan 4,700-5,800 0% -4%
Market Trends
Note: Above values represents indicative asking price for premium properties
Only secondary market products capital values mentioned
*Represents base selling price
Research &
Forecast Report
PUNE | RESIDENTIAL
April 2016
Source: Colliers International India Research
Source: Colliers International India Research
Market Q3 Market Q4 Market Q1 Market Q2