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Demonetisation affects the realty market too
ST Correspondent | Friday, 12 May 2017 AT 11:05 AM IST
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Pune: Magicbricks’ PropIndex for Jan-March 2017 has hinted that while the overall realty market scenario remains weak, as a direct impact of demonetisation, there is little evidence of any major price correction in the secondary or resale market, as predicted earlier.

According to the latest PropIndex, major suburban and core city localities in mid to higher budget segments have done relatively well in terms of quarterly price gain as compared to peripheral areas, especially in Chennai and Pune. The survey also hinted that Pune peripheral localities, on an average, saw a price decline but areas close to industrial clusters like Moshi, Chakan and Talegaon Dabhade have seen price increment.

The survey, which covered 750 major localities spread over 14 key cities, revealed that despite the cash ban, the much expected landslide price depreciation of 5 to 20 per cent did not materialise for the lack of transaction volumes in the market and stickiness to price from the seller side.

The survey report stated that Ready-to-Move (RM) properties continued to command a premium over Under-Construction (UC) properties. “Although, the price of RM properties has seen a comparative decline and the difference of price between RM and UC properties now stand at 5.5 per cent as against 9 per cent a year ago. At the same time, price of UC properties has seen a marginal increment, net result being closing of gap between price of RM and UC properties,” the report explained.
The report also states that the majority of supply and consumer preference in the Indian residential market is in the Rs 3,000 to Rs 6,000 per sq ft budget segment. “Given the fact that price in segment is likely to remain stagnant, the current market scenario is likely to persist for at least over next 3 to 6 months. More than 50 per cent of the over 750 localities across 14 cities fall within this price range,” the report added.

Speaking on the trend, CEO of Magicbricks Sudhir Pai said, “The latest PropIndex reveals that the South Indian cities of Bengaluru, Hyderabad and Chennai have witnessed price gain of 1.5 per cent while prices in the National Capital Region (NCR) fell by 1 per cent during the quarter. Among NCR cities, Delhi has undergone a maximum price decline across all segments.”

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