Mumbai: The real estate market is sluggish in Mumbai, but, looking at the absorption rate, residential property is selling like hotcakes in other cities like Bangalore, Chennai and Gurgaon.
The absorption rate is the number of apartments sold in a month from the available inventory in a market. It is an indicator of the demand situation in a particular real estate market. For example during the calendar year 2011, Mumbai (including Navi Mumbai and Thane) saw 6,650 apartments sold each month against 9,092 in 2010, according to global bank JP Morgan. This means, the absorption rate fell 27 per cent.
Every property market has an inventory of apartments. If the absorption rate is high, the inventory gets exhausted quickly. With the absorption rate in Mumbai falling, it will take two years to sell the unsold inventory.
Property trends in five major cities are explained below:
Mumbai: JP Morgan expects prices to correct in Mumbai only when some new residential projects are launched. Currently, high prices are keeping buyers away. Over the past one year, residential prices in Mumbai have remained flat. In pockets like central Mumbai and North Mumbai, they have increased by 10 per cent. New project launches fell 50 per cent during the calendar year 2011.
Gurgaon: The residential absorption rate in Gurgaon rose 11 per cent in 2011. This is largely due to a high launch activity in the market. Property prices in the market rose 17 per cent during the year. Unsold inventory in the market remains at healthy nine months of average absorption. This means the demand for homes in Gurgaon is much higher than Mumbai.
Bangalore: The residential absorption rate in Bangalore grew 19 per cent in 2011. This was primarily driven by large affordable launches done by reputed developers. Price appreciation now seems to be catching up in Bangalore with completed/nearing completion projects witnessing 10-15 per cent appreciation over the last few months. New launches in Bangalore rose 56 per cent in 2011. Average property prices rose up to 24 per cent across key real estate pockets during the same period.
Chennai: The residential absorption rate in Chennai rose 37 per cent in 2011. High launch activity has resulted in increased unsold inventory in the market. Unsold inventory rose to15 from 10 months early last year. Average property prices rose 8 per cent to 30 per cent in pockets from Anna Nagar to Rajeev Gandhi Salai.
Noida: The residential absorption rate in Noida fell 31 per cent in 2011. In Greater Noida, it fell even further at 56 per cent. This indicates a sharp slump in demand due to a weak buyer sentiment given the recent political change that could impact project approvals/new launches. In Greater Noida, construction progress of launched projects has also slowed down in the market due to contraction of funds by banks/NBFCs. Average property prices in Noida rose 6 per cent.
bangalore is been a leading real estate development city including residents,commercial and even education purpose also
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