Realty buyers are back in south India

News Posted - 2010-04-14

While Mumbai and the National Capital Region may be reeling under a slowdown in home sales, it is a different story for southern markets led by Bangalore, Chennai and Hyderabad. Spurred by the recent IT revival and stable prices, these markets have now begun clocking in stellar sales growth, reports CNBC-TV18's Priyanka Ghosh.

The real estate recovery cycle is now knocking on the doors of Bangalore, Ahmedabad, Hyderabad, and Chennai. These markets have witnessed a number of fresh launches in the past quarter after a lull of almost a year-and-a-half.

For instance,Godrej Properties launched its Garden City project in Ahmedabad, selling 800 apartments within 10 days.

Bangalore-based Sobha Developers clocked in sales of 345 apartments versus 431 in the previous quarter, which also included a new launch.

Unitech launched 83% of its new launches in markets other than Mumbai and NCR that includes Chennai, Kochin and Kolkata.

The Prestige Group too has received encouraging response from its launch of White Meadow project in Bangalore.

V Hari Krishna, Director, Kotak Realty Fund, said, "Delhi was the first market to revive in the early part of last year. Then in the first quarter, Mumbai revived. Now, we have seen strong recovery back in Bangalore. Incidentally, we are seeing some decent sales in premium end projects in Hyderabad as well. We are seeing similar results in Chennai as well."

Experts say the spurt in sales have been triggered by the recovery in the IT sector. Infosys has revised its hiring estimates by over 150% in the past one year while Wipro has said it will hire 11,000 people this financial year, up from 8,000 last year.

These markets that had been pushed on the backburner may attract investments too. Apart advantage IT, attractive pricing is also key for the spurt in sales. Experts say prices in these markets are almost 20% below their peaks, a stark difference from Mumbai, which is now reeling under low inventory, low sales and an pricing pressure.

Abhisheck Lodha, MD, Lodha Developers, said, "Last year, a lot of people pushed a lot of launches into the market because they wanted to sell whatever they could. You are not going to see that sort of a thing happening every year. I think prices are likely to go up by 10-15% this year from where we stand today."

Industry experts are hoping that the IT revival will also finally lead to a recovery in the commercial sector soon.

Source: 12/4/10