FOREWORD The year 2013 has been a topsy-turvy ride for the housing sector. Sentiments have remained subdued in the recent months. However, our latest HSI report indicates early signs of a bump-up in the buyer sentiment. While it is still early days to conjecture whether this will translate into a strong buying cycle, the trend will nevertheless come as a welcome relief to the industry. Property markets remained slow in the quarter. But we bring you PropIndex with a host of positive findings. Key Findings l Residential properties worth between Rs 30-50 lakh continued to see maximum demand. l Consumer demand for premium villas/independent houses worth Rs 2 crore and above topped in Bangalore and Gurgaon. l Delay in projects has pushed demand for ready-to-move-in projects significantly. This is primarily due to increasing pressure of EMI plus rental values. l Resale projects have become significantly more affordable as slow transaction rate has widened the gap between resale and new property prices. l There is active search indicating intense interest among buyers. As soon as sentiments change, probably after the upcoming general elections in 2014, buyers will be ready with information and there may be quick turn around of sales. l Consumer demand for residential plots topped in Chennai and Bangalore. Close to 50 per cent demand for residential plots was for properties worth upto Rs 30 lakh. l In the latest quarter, Oct-Dec 2013, the NPI showed no change in comparison to a 4 per cent rise in the Jul-Sep 2013 quarter. Cautious approach among property seekers and controlled supply by local as well as national developers has held the growth of the National Property Index (NPI). l The Listed Price Monitor, which largely shows capital appreciation/drop within a locality ranged between minus 1 per cent to plus 5 per cent. We have been publishing PropIndex for close to three years now. Over this period, we’ve accumulated a wealth of data/analytics on price/locality trends and market performance. We get our kicks if all of this helps you in making better informed property decisions. Do write in at [email protected] and share your views on this report and how we could make PropIndex even better. Sudhir Pai Business Head, Magicbricks.com METHODOLOGY Magicbricks PropIndex are aggregated into their been chosen based on respective cities and their activity levels) and Magicbricks PropIndex then to the National has an individual city is a tool which Index. Weightages for report for each of these empowers property PropIndex are based on cities. While the NPI and seekers and investors the supply of properties its movements are of with detailed within the locality/city. interest to the expert information on the Based on this structure, community of bankers, movement of residential PropIndex gives a builders and investors, apartment prices and realistic picture of the PropIndex has also supply of properties in trends in price/supply taken care to explain the India. No credible across different property nuances of index property index can be a markets in each city. We movements at the function of direct values have used different locality level that would as the changes are weightages for Listed help the huge base of governed by multiple Price Monitor/Rent Magicbricks.com factors. Monitor. Therefore, read consumers. as a whole, PropIndex Magicbricks PropIndex Insights into consumer along with tables has taken this reality demand have been provided for Listed Price into account and gathered through Monitor, Rent Monitor, produced an index based analysis of search Yield Monitor and on listing of apartments information on the site. Capital Values, gives an and their capital and This helps understand excellent perspective of rental values on the the best localities by the property market website. demand, the type and performance in the configuration of units as Magicbricks has over quarter. 600,000 active properties well as the budget-wise posted by more than While listing and its preferences. values/supply provide a 1,50,000 active users in The PropIndex is the level of understanding 300 cities and 10,000 result of meticulous of the market, there are localities. Our users research at the locality meticulous data checks include owners, agents level and through to prevent aberrations and developers. detailed discussions creeping in the Index. with experts at These are based on Magicbricks.com’s Methodology statistical calculations, offline and online industry inputs and Apartment values are initiatives. based on listings on logical interpretations. The Indian real estate Magicbricks. These The National Property market is dynamic and include multistorey Index (NPI) is indicative the PropIndex reflects apartments and single of the extent of activity those changes. Since it is units on plotted as well as price derived from a dynamic developments, referred movements across cities database, additions and to as builder floors on and localities in the deletions of localities Magicbricks.com. major cities active on happen as a function of Magicbricks.com. The The Index is structured market dynamics. in such a way that index includes the top individual properties 11 cities (these have 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 Oct-Dec 2013 quarter from different perspectives – from that of capital appreciation, from a rental/yield realisation perspective and from a supply standpoint. Also, Demand Analysis section, explains what consumers look for. 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 the 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 – This metric shows the capital appreciation/drop within a locality and 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/drop. 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/drop. However, in a few select 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-Sep 2013 and Oct-Dec 2013 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. PropIndex also focuses on news bytes that impact future prospects of real estate in the city. VOL 3, ISSUE 3; OCT-DEC, FY 2013-14 propindex.magicbricks.com NATIONAL PROPERTY INDEX (NPI) OCT-DEC 2013 n Slow transactions widened the gap between resale and new property prices n Delay in projects pushed demand for ready-to-move-in projects significantly.