End-users rule the market in 2016

Nearly 97 per cent of the demand for residential units during the January-March quarter of 2015-16 came from end-users, a survey said. The survey by real estate portal PropTiger, titled ‘Realty Decoded’, said the share of end-users in total demand is seeing a continuous increase, with the figure standing at 77 per cent in first quarter of the previous fiscal.

“Affordability and end use are going to define rules of the game. The market is seeing a fundamental shift with end users emerging as the key buyer segment across all cities.

“Given the price sensitive behaviour and demand for real use from this segment, the downside on both sales and prices, if any, is expected to be limited from here on,” said the company’s Business Head (Consulting and Data Insights) Anurag Jhanwar.

The study covered nine key cities — Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

However, sales during the quarter declined to 51,000 units over October-December 2015.

“In the four previous quarters, sales have hovered in the range of 49,000-57,000 units. However, the pace of decline, at four per cent over previous quarter, has come down to one of the lowest in the past nine quarters,” the report said.

Hyderabad was the only city to show a sales increase during the January-March period, growing 5 per cent over the same quarter previous year. All other cities witnessed sales declines of 4-44 per cent from fourth quarter of 2014-15.

The report indicates that the ongoing lull in the residential market is reflected in a continuous fall in launches and absorption, affecting stakeholder sentiment. 

“The sector is also grappling with a slow inventory movement....Launch of new projects has declined 14 per cent from the previous quarter and 51 per cent compared with the same period the previous year – all cities have seen decline in new launches, indicating a reduction in the activity levels across primary residential markets,” Jhanwar added. 

According to the research and analysis of the report, the affordable segment (sub Rs 50 Lakh budget) continue to command large share of total residential sales, with over 50 per cent of total sales in all four quarters of the financial year coming from this segment. The segment is expected to see further traction with the recent incentives announced in the Union Budget for both developers and first time property buyers.  — TNS and PTI