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India Property Sector ------------------------------------------------------------------------------------------
Prices continue to inch upwards, volumes yet to recover meaningfully
● All-India ex-Noida volumes saw seasonal pickup in 4QCY10 with
13% QoQ increase, but were still 29% below pre-crisis levels.
Average prices continued to inch upwards with all-India ex-Noida
prices rising 6% QoQ and 15% YoY in 4QCY10.
● Volumes in MMR continued to slow down 6% QoQ and 34% YoY
in 4Q10. Average prices continued to rise further to Rs9,401/sq ft,
up 25% QoQ and 59% YoY. Average inventory remained low at
nine months of demand in MMR as of Dec-10, compared to eight
months as of Sep-10.
● Over-heating in the South and Central Mumbai property market
continued and was evident as 32% of volumes in MMR in
4QCY10 were absorbed at Rs10,000/sq ft and above, compared
to 19% in 3QCY10 and only 10% in 4QCY09.
● Disappointment on pre-sales volumes for developers could
continue in FY12, if developers’ focus on the premium segment
and unwillingness to cut prices continues. In our view, a 10-30%
property price correction across major cities, especially MMR, is
imminent and necessary to propel volumes once again.
Prices inch upwards, volumes yet to recover meaningfully
All-India ex-Noida volumes witnessed seasonal pickup in 4QCY10
with 13% QoQ increase, but were still 29% below pre-crisis levels.
Increase in volumes was driven by Gurgaon, Chennai and Hyderabad
whereas Mumbai Metropolitan Region (MMR) and Kolkata saw
sequential decline. Noida and Greater Noida, which had been
witnessing exorbitant volumes, saw 20% QoQ decline in volumes in
4QCY10. All-India ex-Noida average prices continued to inch upwards
6% QoQ and 15% YoY in 4QCY10.
Pickup in new launches in most cities (except Kolkata) was
encouraging as aggregate all-India ex-Noida new launches went up
67% QoQ. Average inventory levels continued to remain low at 12
months of demand as of Dec-10 compared to 11 months as of Sep-10.
MMR continues to see price increases, volumes slow down
Volumes in MMR continued to slow down to 6% QoQ and 34% YoY in
4QCY10. Average prices continued to rise further and stood at
Rs9,401/sq ft, up 25% QoQ and 59% YoY. New launches picked up
as 14.5 mn sq ft was launched in 4Q10 compared to 10 mn sq ft in
3Q10. Average inventory stood at nine months of demand as of Dec-
10 compared to eight months as of Sep-10.
Volume-price mix continues to shift in favour of higherpriced
properties, especially in MMR
On all-India (ex-Noida) basis, 19% of volumes in 4QCY10 were
absorbed in the premium segment (Rs5,000/sq ft and above)
compared to 16% in 4QCY09. However, volume-price mix shifted
sharply towards high-priced properties in MMR as 32% of volumes in
4QCY10 were absorbed at Rs10,000/sq ft and above, compared to
19% in 3QCY10 and only 10% in 4QCY09. This indicates increase in
average price in MMR in 4QCY10 is significantly driven by volumesmix
change rather than absolute property price increases.
FY12 unlikely to see volume pickup unless prices correct
Pre-sales volumes for most developers were below expectations for
9MFY11. We believe that disappointment on volumes could continue
in FY12 if developers’ focus on premium segment and unwillingness
to cut prices continues. In our view, a 10-30% property price
correction across major cities, especially MMR, is imminent and
necessary to propel volumes again, and would also augur well for the
developers.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Property Sector ------------------------------------------------------------------------------------------
Prices continue to inch upwards, volumes yet to recover meaningfully
● All-India ex-Noida volumes saw seasonal pickup in 4QCY10 with
13% QoQ increase, but were still 29% below pre-crisis levels.
Average prices continued to inch upwards with all-India ex-Noida
prices rising 6% QoQ and 15% YoY in 4QCY10.
● Volumes in MMR continued to slow down 6% QoQ and 34% YoY
in 4Q10. Average prices continued to rise further to Rs9,401/sq ft,
up 25% QoQ and 59% YoY. Average inventory remained low at
nine months of demand in MMR as of Dec-10, compared to eight
months as of Sep-10.
● Over-heating in the South and Central Mumbai property market
continued and was evident as 32% of volumes in MMR in
4QCY10 were absorbed at Rs10,000/sq ft and above, compared
to 19% in 3QCY10 and only 10% in 4QCY09.
● Disappointment on pre-sales volumes for developers could
continue in FY12, if developers’ focus on the premium segment
and unwillingness to cut prices continues. In our view, a 10-30%
property price correction across major cities, especially MMR, is
imminent and necessary to propel volumes once again.
Prices inch upwards, volumes yet to recover meaningfully
All-India ex-Noida volumes witnessed seasonal pickup in 4QCY10
with 13% QoQ increase, but were still 29% below pre-crisis levels.
Increase in volumes was driven by Gurgaon, Chennai and Hyderabad
whereas Mumbai Metropolitan Region (MMR) and Kolkata saw
sequential decline. Noida and Greater Noida, which had been
witnessing exorbitant volumes, saw 20% QoQ decline in volumes in
4QCY10. All-India ex-Noida average prices continued to inch upwards
6% QoQ and 15% YoY in 4QCY10.
Pickup in new launches in most cities (except Kolkata) was
encouraging as aggregate all-India ex-Noida new launches went up
67% QoQ. Average inventory levels continued to remain low at 12
months of demand as of Dec-10 compared to 11 months as of Sep-10.
MMR continues to see price increases, volumes slow down
Volumes in MMR continued to slow down to 6% QoQ and 34% YoY in
4QCY10. Average prices continued to rise further and stood at
Rs9,401/sq ft, up 25% QoQ and 59% YoY. New launches picked up
as 14.5 mn sq ft was launched in 4Q10 compared to 10 mn sq ft in
3Q10. Average inventory stood at nine months of demand as of Dec-
10 compared to eight months as of Sep-10.
Volume-price mix continues to shift in favour of higherpriced
properties, especially in MMR
On all-India (ex-Noida) basis, 19% of volumes in 4QCY10 were
absorbed in the premium segment (Rs5,000/sq ft and above)
compared to 16% in 4QCY09. However, volume-price mix shifted
sharply towards high-priced properties in MMR as 32% of volumes in
4QCY10 were absorbed at Rs10,000/sq ft and above, compared to
19% in 3QCY10 and only 10% in 4QCY09. This indicates increase in
average price in MMR in 4QCY10 is significantly driven by volumesmix
change rather than absolute property price increases.
FY12 unlikely to see volume pickup unless prices correct
Pre-sales volumes for most developers were below expectations for
9MFY11. We believe that disappointment on volumes could continue
in FY12 if developers’ focus on premium segment and unwillingness
to cut prices continues. In our view, a 10-30% property price
correction across major cities, especially MMR, is imminent and
necessary to propel volumes again, and would also augur well for the
developers.
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