The Indian residential market experienced a significant downturn in the latter half of 2017, marked by a 78% drop in launches from the peak in 2010 and a 41% year-over-year decrease. Sales volumes reached a seven-year low, with major cities like Hyderabad experiencing an 84% decline in new launches, while prices fell for the first time in many areas. The market faced pressures from RERA and GST compliance, leading to high unsold inventory and concerns about the aging of this stock.

1. INDIA
RESIDENTIAL
JULY TO DECEMBER 2017
KnightFrank.co.in

2. 2
Unsold inventory, RERA pressures
derail India residential market
RESIDENTIAL
RECAP H1 2017

3. High unsold inventory,
RERA & GST compliance
and lacklustre demand
Yearly launches
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad
3
4,80,424
4,66,422 4,58,228
4,20,105
3,19,659
2,44,065
1,75,822
1,03,570
2010 2011 2012 2013 2014 2015 2016 2017
Launches come to a grinding
halt - 78% down from the high
of 2010 and 41% less YoY
No.ofunits

4. 4
1,65,426
1,54,233
1,17,200
1,26,865
1,07,120
68,702
62,738
40,832
H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017
Half-yearly launches
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad
Launches below
demonetisation-hit
H2 2016 -
down 41% YoY
No.ofunits

5. • All markets experienced a YoY fall –
India wide launches down by 41%
• Hyderabad saw the maximum fall in
launches at 84% YoY while other
IT/ITeS sector dominated markets of
Pune, Bengaluru and Chennai fell by
58%, 37% and 33% YoY respectively
City-wise half-yearly
launches –
Hyderabad worst hit
MUMBAI
-23%
NCR
-25%
BENGALURU
-37%
CHENNAI
-33%
PUNE
-58%
KOLKATA
-32%
AHMEDABAD
-44%
HYDERABAD
-84%

6. Sales were down
7% YoY
6
3,61,483 3,68,568
3,59,308
3,29,238
2,79,822
2,67,957
2,44,686
2,28,072
2010 2011 2012 2013 2014 2015 2016 2017
Yearly sales
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad
Sales volume hit
seven-year low;
38% down from
peak of 2011
No.ofunits

7. 7
1,43,441 1,40,527 1,41,341
1,09,159 1,07,316
H2 2013 H2 2014 H2 2015 H2 2016 H2 2017
Half-yearly sales
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad
Half yearly sales
marginally below the
demonetisation-hit
H2 2016
No.ofunits

8. India wide sales down by 2% in
H2 2017
Mumbai and NCR see a spike
over demonetisation-hit 2016
H2 2017 sales struggle
across markets –
Bengaluru down by 34%
MUMBAI
19%
NCR
21%
BENGALURU
-34%
CHENNAI
-14%
PUNE
-2%
KOLKATA
-17%
AHMEDABAD
5%
HYDERABAD
-13%

9. As an exception, prices marginally
higher in Ahmedabad and Hyderabad
‘Effective’ price discount of 10-15% in
cities like Mumbai, NCR, Pune and
Kolkata
First time price drop in
major cities
MUMBAI
-5%
NCR
-2%
BENGALURU
-5%
CHENNAI
-3%
PUNE
-7%
KOLKATA
-5%
AHMEDABAD
2%
HYDERABAD
3%

10. 90
95
100
105
110
115
120
125
130
10
CPI
Prices against retail inflation
Kolkata and NCR show
maximum divergence
Pune price has fallen
sharply
Mumbai and Bengaluru
also experience a
perceptible decline
HYDERABAD
BENGALURU
MUMBAI
AHMEDABAD
PUNE
NCR
CHENNAI
KOLKATA

11. Quarters-to-sell is stagnant at around 3
years since 2015 due to drastic drop in
launches
Increasing age of
unsold stock is a
concern at a pan India
level
Unsold
inventory
Quarters-to-sell
Age of
inventory
H1 2014 7,14,577 9.0 8.0
H2 2014 7,14,972 10.1 8.6
H1 2015 7,10,340 11.3 9.9
H2 2015 6,91,733 11.5 10.8
H1 2016 6,60,239 11.3 11.9
H2 2016 6,52,996 11.3 12.7
H1 2017 5,96,044 11.3 13.1
H2 2017 5,28,494 11.2 15.3
QTS and age in quarters

12. 109,112 units
QTS: 10.6
Age: 13.0
115,964 units
QTS: 7.6
Age: 15.6
Age of inventory a big
concern for NCR and
Hyderabad
MUMBAI
NCR
BENGALURU
PUNE
KOLKATAAHMEDABAD
166,831 units
QTS: 17.2
Age: 18.5
39,252 units
QTS: 12.1
Age: 12.1
17,356 units
QTS: 5.0
Age: 17.8
24,640 units
QTS: 6.2
Age: 14.2
26,884 units
QTS: 7.0
Age: 10.3
24,455 units
QTS: 3.4
Age: 12.6
CHENNAI
HYDERABAD

13. Meltdown in market volumes continue
Launches and sales see a de-growth in Bengaluru,
Hyderabad records decadal low in launches
Developers buckle to market realities,
price crack evident across cities

14. 14
Industry headwinds, supply crunch affected
India’s largest occupier – IT/ITeS,
office transactions took a hit
OFFICE
RECAP H1 2017

15. 15
35.3
36.5
34.5
30.7
32.7
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2013 2014 2015 2016 2017
Yearly new completions
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Ahmedabad
New completions were
up 7% YoY but not at
par with occupiers’
demand
Mnsqft
Ahmedabad included 2016 onwards

16. 16
17.1
19.5
15.7
18.7 19.0
11.1
17.9
12.5
H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017
Half-yearly new completions
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Ahmedabad
New completions up
13% YoY in H2 2017
Mnsqft
Ahmedabad included 2016 onwards

17. 17
33.62
38.55
41.13 41.60 41.72
2013 2014 2015 2016 2017
Yearly transactions
Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad, Ahmedabad
Transactions
maintained a steady
momentum
Technology sector headwinds
and supply crunch responsible
for subdued growth
Mnsqft
Ahmedabad included 2016 onwards

18. Major cities record
robust transactions in
2017, Bengaluru
maintains its lead
MUMBAI
7.5
NCR
6.4
BENGALURU
11.7
CHENNAI
4.5
PUNE
4.5
AHMEDABAD
1.5
HYDERABAD
5.7
All in mn sq ft
Ahmedabad included 2016 onwards

19. Vacancy levels continue their
steady decline in the face of
inadequate supply
19
19.3%
17.5%
15.6%
13.5%
11.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2013 2014 2015 2016 2017
Vacancy
Vacancy hits five-
year low

20. Tech-driven markets
show single digit
vacancy;
Bengaluru at the
lowest
MUMBAI
20%
NCR
17%
BENGALURU
3%
CHENNAI
10%
PUNE
6%
AHMEDABAD
24%
HYDERABAD
5%

21. 21
Industry H2 2017 H2 2016
BANKING, FINANCIAL
SERVICES & INSURANCE
14% 14%
IT/ITeS 36% 49%
MANUFACTURING 15% 17%
OTHER SERVICES
(INCL CO-WORKING)
36% 21%
Co-working service
providers - an emerging
trend; IT/ITeS share
declines
Co-working service providers take up
1.3 mn sq ft approximately across
Mumbai, NCR, Pune and Bengaluru

22. 22
Office market feels pressure as headwinds for IT/
ITeS persist
Other services sectors (especially co-working) emerge
as new gainers
Vacancy levels continue to plummet

23. INDIA
RESIDENTIAL
JULY TO DECEMBER 2017
KnightFrank.co.in
knightfrank.india@in.knightfrank.com