The Silicon Valley of India, Bengaluru has emerged as the top real estate market on the back of healthy sales and inventory to absorption ratio while Gurgaon has slipped to tenth position due to project delays, expensive properties and demand-supply mismatch, according to a report released by real estate data, research and analytics firm PropEquity.
The report ranks the top real estate markets in the country on the basis of key parameters—price, supply, absorption, inventory and new launch trends. It also takes into account execution delays and the size of the market in value terms.
IT city Pune comes as the second best performing market on the back of healthy sales and other broad indicators.
With three of the top five markets— Bengaluru (no. 1), Chennai (no. 3) and Hyderabad (no. 4)—falling in Southern India, the region has moved to the top leaving West and North at second and third positions.
The report notes that the Southern realty market is primarily driven by end users and has not gotten affected by withdrawal of investors over the last couple of years. It also observes that projects there are smaller and are well capitalised and therefore developers are not overstretched.
The slowdown has affected NCR the most. The report states that the region has failed to make its mark on any of the parameters evaluated and thus has low regional as well as city rankings.
NCR has suffered the most as there has been a flight of investors. Over 50 per cent of the sales in NCR have been investor driven since last five-seven years owing to the exponential returns the market gave between 2009 and 2012.
“Noida, Greater Noida, Ghaziabad and Faridbad on the basis of the evaluated parameters are not in top 10 cities of India; only Gurgaon continues to remain on the list at the 10th position. On the other hand, Southern region has performed relatively better across all the parameters and we expect this trend to continue going forward,” said Samir Jasuja, chief executive officer and founder, PropEquity.
Mumbai, which ranked first five years ago, has now slipped to the eighth position, while Bengaluru, which did not even figure in the first five cities, has climbed to the top.
The cities which have fallen the most in rankings are Noida (from fourth to 11th) and Mumbai (from first to 8th), while the city which climbed the most is Hyderabad (from 10th to fourth).
Apart from North, the other market to get heavily affected is West as developers are sitting on a huge debt pile, leading to significant interest payouts without any cash-flow coming in. Buyers are expected to come back to the market once there is further price correction, the report says.
(Edited by Joby Puthuparampil Johnson)