by Mr. Sanjay
Chugh, Jones Lang LaSalle India
The year 2013 began
on an optimistic note, as 2012 had been a successful year for the residential
market. The 1st Quarter of 2013 saw significant land transactions within
Chennai and on the outskirts of the city.
Developers /
promoters were bullish about the market going forward. In 2012, residential
real estate market of Chennai had witnessed significant improvement in terms of
buyer interest, which translated into higher volumes of transactions.
Since the market was
on a high, the first quarter saw a surge towards property development and
project launches in the suburban and peripheral areas of Chennai.
Large land parcels
were transacted and purchased by leading developers within the CBD of Chennai for residential
developments as there was a huge demand for housing within the city limits.
Although there were signs of markets
slowing down, Chennai still witnessed a healthy sales volume during the first
quarter of 2013.
The second quarter
(Q 2) saw drop in sales all around the SBD as well as other areas in Chennai.
It was only during
the onset of the third quarter (Q 3) that sales velocity had dropped
significantly as buyers’ decision making time increased. This clubbed with market
uncertainty and the cautious sentiment kept the customers
away from making an investment decision. There was also a strong conviction
that prices would correct
in the near future. Other reasons that surfaced were the depreciating Indian
Rupee, shaping of the
global economies and slowing industrial growth.
During this phase,
many developers also deferred their plans to launch new projects and initiated
attractive offers
and schemes to attract buyers.
The fourth quarter
of 2013 (Q4), started on a subdued note through October and November. However,
there were signs of renewed customer interest in December as NRI segment
started evaluating investment
opportunities in Chennai along with local buyers, as prices has remained stable
over the last two quarters, there was a sense
that the market had bottomed out.
Developers /
promoters were launching projects keeping in mind specific sizing and pricing
of the apartments to
attract buyers.
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