The Decline Of Luxury Homes And Prices Rise Of Mid-segment Property

According to a February report by Macquarie Research in Delhi the residential property prices have risen by 20% and in Gurgaon and Noida by 15%.

The prices of mid-segment property in Bangalore have risen as demand has held up across the country for such homes over the past few months while they have declined for premium and luxury apartments as buyers have been able to drive a harder bargain in this segment amid the economic slowdown.

Between the month of October and December a number of developers in National Capital Region (NCR)-Delhi, Bangalore, Mumbai and other cities increased the price of their housing stock in Rs. 5,000-12,000 a sq. ft range by 5-20%, throwing off gear analysts predictions of an overall price correction in the sector due to slowing sales and a liquidity crunch.

As stated by research reports of Nomura Equity Research and Macquarie Research, Sobha Developers Ltd and Prestige Estates Projects Ltd. are the two leading developers in Bangalore which increased prices in the December quarter in projects priced at Rs. 4,500-5,000 a sq.ft.

The prices of residential property in Bangalore and Hyderabad increased that are low-margin property markets which are more compulsion for developers to battle input cost rise. However, the price of residential property in Delhi and Mumbai has risen related to the advanced stage of a project where the developer can ask for a premium if it is nearing completion.

Managing Director of Liases Foras, Mr. Pankaj Kapoor said the prices have increased in projects where developers have got funding from non-traditional sources such as private equity funds. Whereas the equity requirement has been met, a developer wouldnt mind sales going to a small degree slower and for a extended period and is in a very position to command an explicit value. And according to Liases Foras, the real estate research firm, prices in Mumbai shot up by 25% year-on-year even as sales were down by 30% in the last quarter.

Few of the important real estate corporations that have managed to garner smart sales have conjointly escalated costs. As an example, Sobha Developers is heading in the right direction to attain its full-year sales volume target. Within the 1st 9 months of this fiscal year, it sold 2.4 million sq ft of latest comes for Rs. 1,240 Crore, though this falls in need of its targeted sales of three million sq. ft for regarding Rs. 1,500 Crore.

Speaking concerning value increase Sobha and Prestige officers had a conference calls with analysts when quarterly earnings announcements, nonetheless couldnt be reached for this story. According to the Knight Frank Prime Global Cities Index, the opposite finish of the gamut, luxury housing in India, notably in its costliest market of property in Bangalore and Mumbai, has seen costs fall sharply.

Boman Irani, President, Maharashtra Chamber of Housing Trade, said costs can still rise as a result of there's strong demand for such projects and patrons are willing to pay. This can be one such reason where the availability is out there and as long because the demand-supply mismatch exists, costs can increase.

by: lokeshmanu24

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