Home Launch Prices Fall by up to 20%

 

Launch prices of mid-segment residential projects fell by up to 20% in 2015 in parts of Mumbai, the National Capital Region and Bengaluru.

 

Launch Prices of Homes Fall the Most in Mumbai in 2015

Biggest price fall of 20% was in Mumbai's Goregaon suburb, followed by Thane, where prices dipped 18%

 

At last, some good news for homebuyers. Launch prices of new, mid-segment residential projects fell as much as 20% in 2015 in select parts of Mumbai, the National Capital Region (NCR) and Bengaluru.

 

The biggest decline of 20% in the average weighted basic sale price was in the Goregaon suburb of Mumbai, where the rate per square foot averaged Rs. 10,500 in 2015, according to a report by Cushman & Wakefield. The property consultant compared average 2015 launch prices in these micro markets with average weighted basic sale prices over the past two years.

 

Goregaon was followed by Thane, where launch prices declined 18%.The Southern Peripheral Road in Gurgaon saw a decline of 10% in average base selling price of newly launched projects compared with rates in 2013.

 

In contrast, launch prices held steady in most submarkets in Bengaluru, except in the far south and western areas, where average new launch prices declined 2-7% from levels in 2013.The south east micro market of Bengaluru was an exception, with increases in both the average weighted basic sale price (19%) and average ticket size (18%) of apartments.

 

“A correction of the launch prices will ensure attractiveness and relevance of these locations to the end users. The economic confidence slowly creeping back into end-user sentiments aided by a corrected base price as well as lowered ticket size is likely to provide the needed boost to improve sales, “said Shveta Jain, managing director, residential services, India, at Cushman & Wakefield. The number of launches declined amid a slump in buyer interest. In the Delhi-NCR area, about 23,000 units were launched last year, with 79% of them along the Dwarka Expressway, New Gurgaon Southern Peripheral Road Sohna, Noida Expressway and Noida Extension. About 12,400 of these units were in the mid-segment.

 

According to Cushman & Wakefield, developers have tried to reduce the size of apartments or scale back their capital values or both with a view to attract buyers. Such efforts took place across submarkets, especially in Southern Peripheral Road, New Gurgaon and Noida. Dwarka Expressway and Southern Peripheral Road saw the largest decline in launch prices in the NCR of 10% aga inst 2013.

 

Mumbai witnessed a 37% decline in residential launches to 15,735 units, with Mulund, Thane, Goregaon and Malad accounting for almost 51% of the total. The new apartments were smaller in configuration and the cost per unit also declined.

 

The submarket of Malad witnessed a cost per unit reduction of 15% although average launch prices (mid segment) declined 8%, primarily due to significantly reduced average unit sizes. The average weighted basic sale price fell 18-20% in Thane and Goregaon as well. Bengaluru unit launches declined 62% to about 15,600 from 2014 levels as slower sales of existing apartments resulted in fewer new units on offer. However, compared to other cities, Bengaluru's market trend has been exceptionally stable, with no reduction in the area or cost of new units.

 

 

Jan 05 2016: The Economic Times (Mumbai)