Bengaluru top home realty market in 14 major cities: Report

New Delhi: Bengaluru has emerged as the top real estate destination in the home segment, followed by Pune and Chennai, according to a report. Mumbai, at first position five years earlier, has slipped to eighth and Gurgaon from seventh at the time to 10th, according to the report by real estate consultancy PropEquity.

Gurgaon’s drop is because the region there is marred by project delays, expensive properties and a demand and supply mismatch. National Capital Region (NCR) cities occupy the bottom ranks in the report, for 14 major cities across India. “The primary reason why NCR has suffered the most is because of a flight of investors. Over 50 per cent of NCR sales have been investor-driven from the past five to seven years,” according to PropEquity chief executive Samir Jasuja. The agency says the rankings are based on various parameters like price appreciation, supply, sales, unsold inventories, delays in project completion and size of the market, among others.

In the southern realty market, prices have remained at realistic levels, rising moderately. Also, land prices in the south are much lower than the northern and western ones. It has been primarily an end-user market and so, did not get adversely affected when investors started to withdraw in the past couple of years, the report said.

The region has also evolved as the information technology hub of India in the past decade. A continuous increase in demand for IT space has maintained the end user-driven demand in these cities. On the other hand, real estate developers in northern India have been deeply impacted by a slowing economy. The report said cities such as Gurgaon and Greater Noida have witnessed unprecedented sales in the residential asset class but the related infrastructure development has not materialised.

Huge delays in completion of projects, high property prices and oversupply also contributed in making the NCR unattractive as a real estate destination, compared with the southern and western regions, said Jasuja. NCR sales dropped 53 per cent during 2014 over the previous year.

About 760,000 housing units are unsold in these 14 cities. Mumbai Metropolitan Region, NCR and Bengaluru together account for a little more than two-thirds of this. Prices of newly launched units rose by five to 16 per cent in the past four years, despite a slowing property market, added the report. However, prices have declined by 20-35 per cent in the secondary markets, forcing developers to offer discounts to buyers in various forms.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.