Chennai: Southern cities have seen relatively faster recovery in the supply and sales of real estate projects in residential, commercial and retail segments in 2018. While Chennai witnessed the fastest growth in the residential segment, Bangalore topped in both supply and absorption in the commercial segment, and Hyderabad in mall supply.
Though the slump in the sector from policy alterations and liquidity crunch stayed, signs of recovery were visible and the southern cities saw far more activity than those in other regions.
In the residential segment, three main southern cities – Chennai, Bangalore and Hyderabad--collectively saw a whopping 77 per cent increase in new supply – from around 38,330 units in 2017 to 67,850 units in 2018, according to Anarock Property Consultants. Chennai led with 98 per cent growth, Bangalore followed with a 91 per cent jump and Hyderabad witnessed a rise of about 43 per cent in new housing stock. NCR saw an increase of just 16 per cent, while Mumbai and Pune together saw a mere 17 per cent rise.
Even in sales, the main southern cities saw a 20 per cent increase in housing sales as against 18 per cent rise in the North and 15 per cent in the West. South has only 19 per cent share of the total 6.73 lakh unsold units across the top seven cities whereas NCR alone has 28 per cent of the total unsold stock.
“This clearly indicates that the housing markets in the southern cities are exceptionally resilient, and were quick to recover from the overall slowdown in the Indian real estate sector. These cities are driven by demand from the IT/ITeS sector. However, more pertinently, these are largely end-user driven markets, unlike cities in the North that were driven by speculators,” said Santosh Kumar, vice chairman of Anarock Property Consultants.
Even in commercial real estate, key southern cities saw collective office space absorption of nearly 21 million sq ft against just 6 million sq ft in the entire NCR. In terms of new supply too, the southern cities were ahead with nearly 14.7 million sq ft of Grade A office space getting deployed. Bangalore retained its top position with more than 9 million sq ft of new supply and registered 37 per cent increase by absorbing 12 million sq ft. The city’s large talent pool, its vibrant start-up culture, ample Grade A office stock, relatively affordable rents and steady demand from the IT/ITeS sectors, BFSI and co-working spaces prompted this growth.
