Real Estate Pulse : ICICI Securities

is pleased to showcase Real Estate Pulse – January, our quarterly sectoral update on Real Estate. Real Estate Pulse intends to provide an insight into the underlying sentiment prevailing among individual home buyers/brokers and the demand-supply dynamics across eight Indian cities. Through the product, we intend to interpret buyer sentiment and its variations juxtaposed with the demand-supply matrix, thereby highlighting the key trends and lending a better understanding of the Indian Real Estate market.The report is based on an online survey of 11,891 respondents (spread across 25+ cities, various income levels & employment categories), & one-on-one survey including 151 brokers. Pan-India demand-supply data from the ICICI Home Finance Division has also been taken into account. The review period extends from November to December ’10.
Key highlights: Survey indicates a shift in Indian property market outlook to cautious from positive· Buyers anticipate a moderate price trend. Increasing perception that current property prices are high; trend shifting towards a property price decline in the next 12 months.· Affordability, taking a hit. Increase in prices leading to a marked decline in affordability; lack of commitment from buyer evident at current prices. · Brokers still upbeat. Decline in percentage of brokers expecting a price rise; even so, a majority expect an increase in the next six months. Conversion rates picking up with launches.· Demand-supply analysis. Supply catching up fast with demand. Absorption in Mumbai, Pune & NCR, witnessed a steep decline in September-November, with Bengaluru, Kolkata & Ahmedabad witnessing a healthy trend.· We believe Bengaluru (better affordability), Kolkata (low volume & high demand) & Ahmedabad-based developers are better placed due to moderate prices & healthy absorption run-rate. Mumbai (on poor affordability) & NCR (sharp increase in supply) based developers are likely to witness lower volumes & price realisation.