Residential unit launches are up by 25 per
cent in Q1 2016 vs Q1 2015; and affordable segment launches have risen
6-fold, stated a report released by Cushman & Wakefield recently
The first quarter of 2016, witnessed the launch
of approximately 31,200 units, across the top eight cities in India,
recording an increase of 27 per cent year-on-year, stated a report
released recently by property consultants Cushman & Wakefield. The
residential market, which saw a slump in launches in 2015, saw a
remarkable comeback in the first quarter, backed by a six-fold rise in
launches in the affordable housing segment, which saw an addition of
over 10,950 units during Q1 2016, as developers foresee greater demand
in this highly price-sensitive segment.
The affordable segment accounted for
approximately 35 per cent of the total launches during Q1 2016. Over the
last few quarters, the share of affordable housing has constantly
increased as developers and investors are viewing this segment more
favourably. Affordable housing segment comprised of 22 percent of the
total unit launches seen in 2015, up from its share of 17 per cent in
2014. In the same time, average launch prices have witnessed some
decline across major cities, making the new projects cheaper than those
launched 12- 24 months back. “Developers have come to realise the vast
potential of what was untapped in ithe affordable housing segment. They
have now come to recognise the potenetial of the segment and are
expecting greater momentum in demand in the affordable segment as
Customers are seen to be more price-sensitive in the current market,”
says Shveta Jain, executive director, residential services at Cushman
& Wakefield.
Mumbai witnessed a significant drop in launch prices
of close to 35 per cent in Q1 2016, as against to those launched in Q1
2014. The average launch price for affordable units de clined by 36 per
cent in Q1 2016 from Q1 2014 to approx. 4,300 per square feet (psf), as
developers look to attract the buyers in the low-cost segment in Mumbai.
Developers have also been adopting a strategy of offering residential
units in smaller sizing in order to attract buyers.The average unit
size of affordable units was seen at approximately 850 sf, an 11 per
cent decline over a period of 2 years between Q1 2014 and Q2016. During
the current quarter, launches in Mumbai accounted for 17 per centof
total launches (across 8 cities) at 5,360 units. This represents an
increase of 35 per cent, in Q1 2016, as compared to Q1 2015. During the
quarter, the affordable segment accounted ‘for only 5 per cent of total
launches in the city.
The mid-segment accounted for the majority of
launches, with launches in the segment spread across the eastern
suburbs,Thane and Navi Mumbai. “With strong emphasis’on affordable
housing by the government; ‘tax incentives extended by the government,
as well as the cautious approach by end-users, developers' are betting
on the affordable segment,” concluded Jain.
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