Proptiger- 2014 Indian real estate market overview

2014 – Hope at the end of year of despair
Jan 2015

1Source: PropTiger Data Labs Jan 2015
Executive Summary
• 2014 was a mixed bag for Indian real estate market
- At one end real estate market continued to slow down nearly on all parameters
- At other end new government announced multiple policy initiatives to revive the market
• Launch of new supply in top markets dropped by 52% whereas sales slowed down only by 37%
which helped bring unsold inventory down from 2013
• At present only 14% of unsold stock is more than 3 years old, whereas 69% of unsold stock
consists was launched <2 years old
• A distinct focus in the year 2014 was on affordable housing
- Government announced relaxation in FDI rules for affordable housing as well as increased the property
budget to 50 Lakhs to be counted in affordable housing
- > 50% of sales and supply in 2014 was in affordable budget range
• Except Mumbai and Gurgaon, most other markets have significant portion of unsold stock in the
affordable housing category
• Though recovery in real estate was projected in last 2 quarters of the year driven by stable and
positive government, yet it turns out it will take 2 – 3 more quarters before impact of economic
recovery is visible in the real estate

543,511
259,660
0
100,000
200,000
300,000
400,000
500,000
600,000
CY 2013 CY 2014
New launches in Top-9 cities*
-52%
543,511
# of units
2014 saw new real estate supply declining by 52%
Notes: * Top 9 Cities are Mumbai (includes Navi Mumbai & Thane), Pune, Noida (includes Greater Noida & Yamuna Expressway), Gurgaon
(includes Bhiwadi, Dharuhera & Sohna), Bangalore, Chennai, Hyderabad, Kolkata, Ahmedabad

92,465
67,325
60,431
39,439
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Q1-CY'14 Q2-CY'14 Q3-CY'14 Q4-CY'14
New launches in Top-9 cities*
Situation has worsened over the quarters
# of units
-57%
92,465

All major cities saw decline in new supply
# of units
Notes: 1. Noida includes: Greater Noida and Yamuna Expressway
2. Bhiwadi includes: Bhiwadi, Rewari, Dharuhera, Behror, Manesar and Neemrana
107,333
83,477
67,623
43,451
47,987
22,716
22,277
23,837
3,765
43,326
26,593
27,778
23,348
58,347
40,864
36,838
26,154
18,402
9,454
7,148
9,215
3,928
20,132
8,456
11,561
9,161
0
20,000
40,000
60,000
80,000
100,000
120,000
Bangalore Noida Pune Mumbai Thane Navi
Mumbai
Gurgaon Bhiwadi Sohna Chennai Hyderabad Kolkata Ahmedabad
Total new unit launches -CY’13 vs CY’14 CY'13
CY'14
2
MMR total new supply
CY’13 (114,154 Units)
CY’14 (54,010 Units)
-46% -40% -62% -58% -68% -61% 4% -54% -68% -58% -61%-46% -51%
% change in new
launches
(CY’13 – CY’14)
Bangalore Noida1 Pune Mumbai Thane Navi Mumbai Gurgaon Bhiwadi2 Sohna Chennai Hyderabad Kolkata Ahmedabad
1

Large part of new supply was affordable (<50 lakhs)
44,142
96,074
51,932
23,369
44,142
0
50,000
100,000
150,000
200,000
250,000
300,000
< 25 Lakhs 25-50 Lakhs 50-75 Lakhs 75-100 Lakhs 1+ Crore Total Units
Budget range wise unit launches in Top-9 cities*
(Jan’14 to Dec’14)
# of units
100%
259,660
17%
37%
20%
9%
17%

Development authorities also launched significant supply of
affordable units in 2014
Developer Project Name Project Status City Area Micro-market
Launched
Units
DDA 2014 scheme Completed Delhi Delhi various 25,034
YEIDA NA Under Construction Noida
Yamuna
Expressway
Sector 22A 2862
CIDCO Valley Ship Under construction Mumbai Navi Mumbai Sector 36, Kharghar 1224
MHADA NA Completed Mumbai Mumbai Mumbai and Konkan 2641
GLS Infratech Arawali Homes Upcoming Gurgaon Sohna Sec-4, Sohna 1,424
Pivotal Infrastructure Devaan Upcoming Gurgaon Dwarka Expressway Sec-84 896
MVN Athens Upcoming Gurgaon Sohna Sec-5, Sohna 1,078
Signature Developers Solera Upcoming Gurgaon Dwarka Expressway Sec-107 1,000
AVL Infrastructure AVL Infra Upcoming Gurgaon NH8 Sec-36A 1,480
Pivotal Infrastructure Pivotal Sector 99 Upcoming Gurgaon Dwarka Expressway Sec-99 992
Signature Developers Synera Upcoming Gurgaon New Gurgaon Sector 81 824
Supertech Basera Upcoming Gurgaon SPR Sector 79 1976
Raheja Krishna Housing Upcoming Gurgaon Sohna Sector 14 1660
Notes: 1. Price weighed on number of BHK units in respective projects
Under HUDA
affordable
policy

490,356
307,764
0
100,000
200,000
300,000
400,000
500,000
600,000
CY 2013 CY 2014
Unit sales in Top-9 cities*
-37%
307,764
490,356
# of units
Unlike new supply, sales have dropped only by 37%

This has reduced unsold inventory units over the quarters
623,031
616,317
609,577
606,491
596,633
579,362
568,764
551,033
500,000
520,000
540,000
560,000
580,000
600,000
620,000
640,000
Q1-CY'13 Q2-CY'13 Q3-CY'13 Q4-CY'13 Q1-CY'14 Q2-CY'14 Q3-CY'14 Q4-CY'14
Unsold inventory at quarter end in Top-9 cities*
# of units

Affordable segment contributed more than 50% to sales
57% 58% 58% 56% 54% 53% 53%
18% 18% 18% 20% 20% 21% 21%
24% 24% 24% 24% 26% 26% 27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q2-CY'13 Q3-CY'13 Q4-CY'13 Q1-CY'14 Q2-CY'14 Q3-CY'14 Q4-CY'14
Sales in Top-9* cities by budget segment
Affordable Segment Mid Segment Luxury Segment
Notes: 1: Affordable Segment : Units within < 50 Lakhs budget range
2: Mid Segment : Units within 50-75 Lakhs budget range
3: Luxury Segment : Units in +75 Lakhs budget range
1 2 3

Driven by large concentration of demand in 25-50 lakhs
budget range
37%
4%
7%
4%
14% 15%
1% 2%
16%
0% 1%
34%
49%
39%
45%
59%
68%
48%
2%
65%
29%
2%
67%
63%
9%
43%
31%
22%
27%
13%
26%
16%
16%
22%
18%
13%
2%3%
8%
10%
0%
4%
24%
15%
23%
35%
19%
1%1%
6% 6%
0%
5%
58%
2%
9%
44%
0% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
+1 crore
75-100 Lakhs
50-75 Lakhs
25-50 Lakhs
< 25 Lakhs
% of demand
1 2
Budget wise real estate consumer demand3 CY’14
3. Based on survey of enquiries received by PropTiger

Drop in sales was severe in Noida, Gurgaon, Bhiwadi, Navi
Mumbai, Ahmedabad, Kolkata and Hyderabad
Annual new home sales (# of units)
City CY'13 CY'14
Absorption Change
(CY'13 – CY'14)
Bangalore 82,423 57,203 -31%
Noida 78,872 45,132 -43%
Pune 67,784 43,421 -36%
Mumbai 44,441 31,016 -30%
Thane 36,644 25,204 -31%
Navi Mumbai 24,161 13,881 -43%
Chennai 40,386 25,730 -36%
Hyderabad 24,674 13,561 -45%
Ahmedabad 25,756 14,515 -44%
Kolkata 21,304 16,247 -24%
Gurgaon 24,355 10,887 -55%
Bhiwadi 17,146 9,171 -47%
Sohna 2,410 1,796 -25%
Total Sales 490,356 307,764 -37%
1
2

Drop in sales is primarily contributed by new launches
# of units
66,636
51,198
46,083
39,517
30,408
22,959
16,896
62,257
63,632 63,097
58,652
52,591
45,640
41,101
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Q2-CY'13 Q3-CY'13 Q4-CY'13 Q1-CY'14 Q2-CY'14 Q3-CY'14 Q4-CY'14
Sales in Top-9* cities New launch vs Old projects
New Launches (Launch date ≤ 6 months) Old Projects ( Launch date > 6 months)
~75% drop in
last 7
quarters
~34% drop in
last 7
quarters

Mumbai and Noida have the most unsold inventory
105,881
94,872
60,157 58,463
44,084
24,644
43,791
25,652 25,886
22,516 22,317
18,472
4,298
0
20,000
40,000
60,000
80,000
100,000
120,000
Noida Bangalore Pune Mumbai Thane Navi
Mumbai
Chennai Hyderabad Ahmedabad Kolkata Gurgaon Bhiwadi Sohna
Unsold Inventory levels in top 9 cities1 (Dec 2014)
# of units
1 2
Unsold Inventory = 127,191
Unsold Inventory = 45,087

~14% of the unsold inventory is > 3 years old
% of units
Age of unsold inventory in top-9 cities* (Dec 2014)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
≤ 1 Yr 1 Yr-2 Yrs 2 Yrs-3 Yrs > 3 Yrs Total Units
32%
37%
17%
14% 100%
175,408
205,814
96,279
73,532
551,033
Notes: * Top 9 Cities are Mumbai (includes Navi Mumbai and Thane), Pune, Noida (includes Greater Noida and Yamuna Expressway), Gurgaon
(includes Bhiwadi, Dharuhera and Sohna), Bangalore, Chennai, Hyderabad, Kolkata, Ahmedabad

Noida and Mumbai have the above average level of > 3yrs
old unsold inventory
20%
41%
31%
24% 26%
37%
28% 28% 26% 27%
39%
31%
42%
35%
41%
41%
40%
31%
35%
47%
32%
37%
35%
12%
22% 23% 19%
12%
21%
24%
18%
16%
13%
14%
4%
13% 12% 14%
11%
19%
12%
10%
24%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
> 3 Yr
2 Yr-3 Yr
1 Yr-2 Yr
< 1 Yr
% of inventory
1
Age of unsold inventory in top-9 cities (Dec’14)

52% of unsold inventory is in affordable (<50 lakhs) category
% of units
Budget breakup of unsold inventory in top 9 cities (Dec’14)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
< 25 Lakhs 25-50 Lakhs 50-75 Lakhs 75-100 Lakhs 1+ Crore Total Units
15%
37%
20%
9%
19% 100%

Mumbai and Gurgaon have least share of affordable units
42%
5%
13%
45%
26%
8%
14%
11%
22%
34%
11%
17%
37%
36%
43%
49%
8%
40%
52%
16%
33%
34%
49%
42%
9%
28%
24%
12%
5%
49% 22%
16%
7%
20%
11% 25%
23%
4%
12%
8%
16%
12%
10%
8%
12% 7%
8%
8%
8%
19%
12%
70%
19%
8%
59%
13% 14%
7%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
+1 crore
75-100 Lakhs
50-75 Lakhs
35-50 Lakhs
< 25 Lakhs
% of inventory
12
Budget breakup of unsold inventory (Dec’14)

Demand in NCR cities continue to be dominated by investors
84%
88%
75%
92%
58%
77% 77%
72%
76%
62%
59%
64%
16%
12%
25%
8%
42%
23% 23%
28%
24%
38%
41%
36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
End User Demand Investor Demand% of demand
3. Based on survey of enquiries received by PropTiger
1 2
Consumer demand3 by consumer profile- CY’14

Though prices have been stagnant across the cities
Weighted average1 BSP (Rs /sq. ft.) of Apartment units
Notes: 1. Price weighed on number of units in respective projects in a city
City Jan’14 Apr’14 July’14 Oct’14 Dec’14
Price Change
(Jan'14- Dec’14)
Ahmedabad 2,731 2,751 2,772 2,778 2,785 2%
Bangalore 4,295 4,338 4,368 4,444 4,501 5%
Chennai 4,725 4,717 4,737 4,776 4,783 1%
Hyderabad 3,472 3,493 3,516 3,563 3,585 3%
Kolkata 3,817 3,860 3,910 4,037 4,058 6%
Pune 4,737 4,751 4,823 4,897 4,890 3%
Noida 4,482 4,467 4,496 4,467 4,475 0%
Greater Noida 3,434 3,470 3,463 3,440 3,485 1%
Yamuna Expressway 2,936 2,913 2,933 3,025 3,046 4%
Gurgaon 7,613 7,646 7,700 7,736 7,737 2%
Bhiwadi 2,791 2,797 2,781 2,826 2,833 2%
Sohna 3,935 3,991 4,174 3,981 4,113 5%
Mumbai 11,226 11,250 11,590 11,694 11,783 5%
Navi Mumbai 5,250 5,296 5,346 5,389 5,408 3%
Thane 5,530 5,547 5,561 5,639 5,585 1%

Prices of new launches (<6 months old) have shown strong
increase in MMR
Weighted average1 BSP (Rs /sq. ft.) of units within 6 months of launch
Notes: 1. Price weighed on number of units in respective projects in a city
City Q2-CY'13 Q3-CY'13 Q4-CY'13 Q1-CY'14 Q2-CY'14 Q3-CY'14 Q4-CY'14
Price Change
(Q2-CY'13- Q4-CY’14)
Ahmedabad 2,578 2,798 2,797 2,868 3,074 3,269 2,679 4%
Bangalore 4,065 4,194 4,236 4,259 4,134 4,321 4,363 7%
Chennai 4,638 4,617 4,765 4,550 4,642 4,581 4,319 -7%
Hyderabad 3,209 3,262 3,443 3,918 3,860 3,724 3,615 13%
Kolkata 3,442 3,459 3,248 3,388 3,493 3,917 3,805 11%
Pune 4,361 4,353 4,566 4,857 4,557 4,648 4,608 6%
Noida 3,754 3,821 4,546 4,283 4,017 3,707 3,583 -5%
Greater Noida 3,208 3,185 3,237 3,192 3,163 2,190 2,075 -35%
Yamuna Expressway 3,002 3,011 3,075 2,741 2,787 2,807 2,991 0%
Gurgaon 7,927 8,352 8,547 8,137 8,641 7,602 7,160 -10%
Bhiwadi 2,684 2,674 2,725 2,703 2,426 2,349 2,605 -3%
Sohna 3,609 3,609 3,757 3,940 4,736 3,418 3,588 -1%
Mumbai 10,884 12,341 12,076 10,684 10,124 10,867 14,086 29%
Navi Mumbai 4,517 4,012 4,190 4,590 5,069 5,161 4,993 11%
Thane 4,510 4,460 4,455 4,630 5,108 4,975 5,358 19%

Way forward
• Green shoots of recovery are visible
• Economic growth has returned to 5%+ region in last 2 quarters
• Declining crude prices and inflation has given RBI space to cut interest rates which in turn will bring down
home loan rates
• Strong momentum is seen in office space absorption especially in Bangalore, Gurgaon and Pune
• Affordable housing has moved into center from fringes
• Affordable housing is not a buzzword anymore as many builders such as Mahindra Lifespaces, Shapoorji
Pallonji, Sobha developers have opened their affordable housing arm
• Government has modified FDI rules to attract funds into affordable housing in addition to relaxing lending
rules
• Development authorities are launching their own housing schemes to increase supply of affordable units
• End user driven markets with strong economic growth will recover soon
• Bangalore, Pune, Mumbai and Ahmedabad will be the first markets to recover from slowdown
• Chennai might take time to recover due to changed political scenario
• Investor driven NCR will take time to recover
• Economic drivers are presently missing in Noida which is also struggling with oversupply
• Gurgaon though is seeing economic recovery yet lack of infrastructure and high prices are hurdle in real
estate recovery

Contact PropTiger for:
• Detailed analysis of Individual markets
• Micro market surveys
• Real estate data
Amit Ojha
Amit.Ojha@PropTiger.com
+91-9819 5215 78

Proptiger- 2014 Indian real estate market overview

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