Jul-Sep 2012

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Jul-Sep 2012 FOREWORD Happy Diwali and best wishes for the upcoming New Year to all our readers! We are pleased to release the 6th edition of PropIndex in this festival season. Property Markets seem to be making a slow but steady comeback with reducing supply-demand mismatches and a consistent increase in prices supporting the market growth. PropIndex data suggests that many markets have witnessed a 2-8% appreciation in prices during the current quarter. Supply of luxury properties is on the rise, reflecting growing confidence in the builder community; demand for the same also seems to be picking up, although at a slower pace than supply creation. The Land Acquisition Bill, having been cleared by the group of ministers (pending parliament approval), and the anticipated interest rate cuts also auger well for the markets in the coming months. As always, we continue to make improvements to PropIndex. The current issue features new tables that we have added to “Buyer Demand Analysis” within each city. Additionally, we have shown quarter-wise trends of how the demand is shifting between the top 10 localities in each city. Both of these should help explain demand patterns and help you to decipher market trends much better. With PropIndex into its 6th quarterly edition, we now have a bank of very useful trends and content about market performance at a city/locality level and we shall keep making these available to you in later editions of PropIndex. You may also visit MagicBricks.com and explore all our content/research sections which carry ample information about property markets, news and trends. Do share with us on whether PropIndex has helped you in understanding property markets better and in making a more intelligent real estate decision. Our team puts its effort in improving each new edition to meet this stated objective of PropIndex. Your inputs towards this would direct our efforts much better. Do write in! Sudhir Pai Business Head, MagicBricks.com [email protected] METHODOLOGY MagicBricks in such a way that index includes the top 11 PropIndex individual properties are cities (these have been aggregated into respective chosen based on their MagicBricks.com cities and then to the activity levels) and has an PropIndex is a tool which National Index. individual city report for empowers property Weightages for PropIndex each of these cities. While seekers and investors with are based on the supply of the NPI and its movements detailed information on properties within the are of interest to the the movement of locality/city. Based on this expert community of residential apartment structure, PropIndex gives bankers, builders and prices and supply of a realistic picture of investors, the PropIndex properties in India. No trends in price/supply has also taken care to credible property index across different property explain the nuances of can be a function of direct markets in each city. We index movements at the values as the changes are have used different locality level that would governed by multiple weightages for Listed Price help the huge base of factors. Monitor/Rent Monitor. MagicBricks.com MagicBricks.com Therefore, read as a whole, consumers. PropIndex along with PropIndex has taken this Insights into consumer tables provided for Listed reality into account and demand have been Price Monitor, Rent produced an index based gathered through analysis Monitor, Yield Monitor and on listing of apartments of search information on Capital Values, gives an and their capital and the site. This helps excellent perspective of rental values on the understand the best the property market website. localities by demand, the performance in the MagicBricks.com has over type and configuration of quarter. 400,000 active properties units as well as the budget- posted by more than While listing and its wise preferences. values/supply provide a 1,00,000 active users in 300 The PropIndex is the result level of understanding cities and 3,500 localities. of meticulous research at into the market, there are Our users include owners, the locality level and meticulous data checks to agents and developers. through detailed prevent aberrations discussions with experts at creeping into the Index. Methodology MagicBricks.com’s offline These are based on and online initiatives. Apartment values are statistical calculations, based on listings on industry inputs and logical The Indian real estate MagicBricks.com interpretations. market is dynamic and the PropIndex. These include PropIndex reflects those The National Property multistorey apartments changes. Since it is derived Index (NPI) is indicative of and single units on plotted from a dynamic database, the extent of activity as developments, referred to additions and deletions of well as price movements as builder floors on localities happen as a across cities and localities MagicBricks.com. function of market in the major cities active dynamics. -- The Index is structured on MagicBricks.com. The GLOSSARY & DEFINITIONS There is a wealth of information within these pages. For better readability, we have presented some data as tables and others as graphs. Between them, you will find how property markets have performed in the Jul-Sept 2012 quarter from many different perspectives – from that of capital appreciation, from a rental/yield realisation perspective and from the stand of supply of properties. Also understand what consumers want in the Demand Analysis section. We recommend that you evaluate the city report in its entirety and that will provide a rounded perspective of the performance of the property market within each city. Here are details of what you will find in each of the city reports enclosed within - 1. City Property Index – This is a composite index which is a function of supply of properties as well as the average capital appreciation/drop in various localities of the city in the quarter. The city index is the weighted average of the average rate per square foot in that locality and the supply of properties from that locality. Premium localities (with higher average rate per square foot) as well as localities with higher supply of properties will have a bigger impact on the Index. For example, if the supply of properties from a premium locality drops, that locality will end up having a lower weightage in the index which in turn will push the Index downwards (and vice-versa). On the other hand, supply of properties remaining unchanged, the index will be influenced by capital appreciation within the locality. 2. Listed Price Monitor – From this issue, we have changed the name of “Price Monitor’’ to “Listed Price Monitor’’ to reflect the metric more clearly – this metric reflects the movement of “listed prices”on MagicBricks.com over a period of time. This metric shows the capital appreciation/drop within a locality & is calculated on the basis of movement in the “average rate per square foot” within that locality. By and large, the movement in the “average rate per square foot” reflects capital appreciation/ drops. However, in a few select cases, we have observed that the average rate per square foot moves due to a change in the mix of apartments within that locality (e.g. if the ratio of premium apartments, which command a higher per square foot rate, changes over the quarter). In these few circumstances, the Listed Price Monitor will, in turn, reflect this input. Such changes have been explained in the text of the City Reports. 3. Rent Monitor – This reflects the rental appreciation/drop within a locality. It is calculated on the basis of movement in the “average rent per square foot” within that locality. By and large, the movement in the “average rent per square foot” reflects rental appreciation/drops. However, in a few selected cases, we have observed that the average rent per square foot moves due to a change in the mix of apartments within that locality (e.g. if the ratio of premium apartments, which command a higher per square foot rent, changes over the quarter). In these few circumstances, the Rent Monitor will, in turn, reflect this input. Such changes have been explained in the text of the City Reports. 4. Yield Meter – Yield is the annual rate of return earned on property. The Yield Meter depicts the gross yield percentages across various localities. Gross yield is a ratio of average annual rental value to the average capital value of the property. 5. Capital Value Tables (given in Annexures) – This shows the actual range of prices within which properties were available in each locality in the quarter. Prices are shown in rupees per square foot basis; these are the prevailing rates for properties in each locality. 6. Demand Analysis – This analysis of consumer demand is based on searches and requirements that users have performed on MagicBricks.com. The top localities by demand gives an insight into consumer peferences. The demand data has been used to arrive at various aspects of consumer requirements including Budget-wise analysis, Property type analysis and BHK configuration analysis. This section also provides a comparison between demand and supply in the Jul-Sept, 2012 and Apr-Jun, 2012 quarters. 7. Realty News – Property market performance is also dependent on drivers outside the purview of buying and selling. There are broadly four key drivers that determine the prospects of real estate – infrastructure such as water and power, transport links creating new growth corridors, policy such as rental laws, property tax, etc and return on investment. From this issue onwards, PropIndex focuses on news bytes that impact future prospects of real estate in the city. VOL 2, ISSUE 2; JUL-SEP, FY 2012-13 NATIONAL PROPERTY INDEX (NPI) JUL-SEP 2012 n National property index rose by 2 per cent. n Six out of 11 cities posted approximately 50 per cent demand for 2 BHK units n Affordable areas were more in demand in comparison to premium areas in cities such as Pune, Bangalore and Mumbai.
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