New mid segment flats record prices drop upto 20% in key metro markets

A report by Cushman & Wakefiled shows  a drop in launch prices in Banglore, NCR and Mumbai. In the end of the year report for residential market for metropolitan cities, the property prices (Average Weighted Basic Sale Price) over the last 2 years have gotten cheaper by 4%-20% in select micro markets.

The suburban location of Goregaon in Mumbai registered the biggest decline in prices at 20% where the psf rate averages at Rs.10,500 per sf in 2015 followed by Thane which saw 18% decline. Southern Peripheral Road in Gurgaon also saw a decline of 10% in average base selling price of new launch projects compared to 2013. In contrast, most of the submarkets in Bengaluru witnessed steady launch prices except in Far South and Western submarkets where average new launch prices in 2015 declined by 2-7% compared to 2013.

Shveta Jain, Managing Director, Residential Services, India Cushman & Wakefield said, "A correction of the launch prices will ensure attractiveness and relevance of these locations to the end users. The economic confidence slowly creeping back into end user sentiments aided by a corrected Base Price as well as lowered ticket size is likely to provide the needed boost to improve sales."

With declining number of new launches amidst a slump in buyer's interest, Delhi-NCR witnessed new unit launches aggregating approx. 23,000 units in 2015, approximately 79% of the units were launched in  the locations of Dwarka Expressway, New Gurgaon Southern Peripheral Road Sohna, Noida Expressway and Noida Extension in NCR. Half of the total new launches in 2015 were in the mid segment at approximately 12,400 unit.

With a view to attract buyers, developers have tried to bring down the ticket size of their offerings by either reducing unit sizes or reducing capital values or both. Such efforts from developers have been witnessed across submarkets especially in Southern Peripheral Road, New Gurgaon and Noida. Dwarka Expressway and Southern Peripheral Road saw the largest decline in launch prices in NCR of 10% as against 2013 in Base Selling Price.