bengaluru oct dec 2014
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Its a new calendar year and Magicbricks wishes all its readers a VeryHappy 2015. Its been a year where subdued sentiments in the propertymarkets gave rise to euphoria over Prime Minister Modis conclusive winin the General Elections and then settled into a subdued mode again.
In its 15th edition, PropIndex reflected the reality of the real estatemarket in India which clearly gave a green signal for affordability andvalue for money. This was in line with the governments agenda ofpromoting Housing for All by 2022.
City indices remained fairly stable. Riding high on the Modi factorAhmedabad recorded the highest rise of 3 per cent in the City Indexvalues. The Delhi City Index continued to drop (1%) indicating slowuptake in the market.
At the macro level, properties in the affordable or mid-segment rangeswere clearly a popular choice. The budget range of Rs 20-40 lakh saw arise across cities except in Delhi, Gurgaon and Kolkata. In line with thistrend, the 1BHK category saw a rise in demand across all cities. Delhi andGurgaon saw a rise in demand for 2BHK units as well. As the capitalmarkets regained momentum post the formation of the new governmentat the Centre, rental markets were subdued in the Oct-Dec 2014 quarter.Almost 40-50 per cent of the tracked localities in each city recorded adrop in values.
After a dull year, 2015 is expected to bring with it new and positivechanges in the sector. The year is going to be crucial as this is the timewhen the Governments promises would actually be put into practice.
Do write in at Sudhir.email@example.com and share yours views on thisreport and how we could make PropIndex even better. You may also shareyour opinion with #PropIndex on our Twitter handle @magicbricks orconnect with us on Facebook at www.facebook.com/magicbricksTOI.
Sudhir PaiBusiness Head, Magicbricks.com
Magicbricks PropIndexis a tool whichempowers propertyseekers and investorswith detailedinformation on themovement of residentialapartment prices andsupply of properties inIndia. No credibleproperty index can be afunction of direct valuesas the changes aregoverned by multiplefactors.
Magicbricks PropIndexhas taken this realityinto account andproduced an index basedon listing of apartmentsand their capital andrental values on thewebsite.
Magicbricks has over 700,000 active propertiesposted by more than1,40,000 active users in300 cities and 10,000localities. Our usersinclude owners, agentsand developers.
Apartment values arebased on listings onMagicbricks. Theseinclude multi-storeyapartments and singleunits on plotteddevelopments, referredto as builder floors onMagicbricks.com.
The Index is structuredin such a way thatindividual properties
are aggregated into theirrespective cities andthen to the NationalIndex. Weightages forPropIndex are based onthe supply of propertieswithin the locality/city.Based on this structure,PropIndex gives arealistic picture oftrends in price/supplyacross different propertymarkets in each city. Wehave used differentweightages for ListedPrice Monitor/RentMonitor. Therefore, readas a whole, PropIndexalong with tablesprovided for Listed PriceMonitor, Rent Monitor,Yield Monitor andCapital Values, gives anexcellent perspective ofthe property marketperformance in thequarter.
While listing and itsvalues/supply provide alevel of understandingof the market, there aremeticulous data checksto prevent aberrationscreeping in the Index.These are based onstatistical calculations,industry inputs andlogical interpretations.
The National PropertyIndex (NPI) is indicativeof the extent of activityas well as pricemovements across citiesand localities in themajor cities active onMagicbricks.com. Theindex includes the top11 cities (these have
been chosen based ontheir activity levels) andhas an individual cityreport for each of thesecities. While the NPI andits movements are ofinterest to the expertcommunity of bankers,builders and investors,the PropIndex has alsotaken care to explain thenuances of indexmovements at thelocality level that wouldhelp the huge base ofMagicbricks.comconsumers.
Insights into consumerdemand have beengathered throughanalysis of searchinformation on the site.This helps understandthe best localities bydemand, the type andconfiguration of units aswell as the budget-wisepreferences.
The PropIndex is theresult of meticulousresearch at the localitylevel and throughdetailed discussionswith experts atMagicbricks.comsoffline and onlineinitiatives.
The Indian real estatemarket is dynamic andthe PropIndex reflectsthose changes. Since it isderived from a dynamicdatabase, additions anddeletions of localitieshappen as a function ofmarket dynamics.
There is a wealth of information within these pages. For better readability, we have presented some data as tablesand others as graphs. Between them, you will find how property markets have performed in the Oct-Dec 2014quarter from different perspectives from that of capital appreciation, from a rental/yield realisationperspective and from a supply standpoint. Demand Analysis section also explains what consumers look for.
We recommend that you evaluate the city report in its entirety and that will provide a rounded perspective of theperformance of the property market within each city. Here are the details of what you will find in each of the cityreports enclosed within:
1. City Property Index This is a composite index which is a function of supply of properties as well as theaverage capital appreciation/drop in various localities of the city in the quarter. The city index is theweighted average of the average rate per square foot in that locality and the supply of properties from thatlocality. Premium localities (with higher average rate per square foot) as well as localities with higher supplyof properties will have a bigger impact on the Index. For example, if the supply of properties from apremium locality drops, that locality will end up having a lower weightage in the index which in turn willpush 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 calculatedon the basis of movement in the average rate per square foot within that locality. By and large, themovement in the average rate per square foot reflects capital appreciation/drop. However, in a few selectcases, we have observed that the average rate per square foot moves due to a change in the mix of apartmentswithin 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 thisinput. 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 ofmovement in the average rent per square foot within that locality. By and large, the movement in theaverage rent per square foot reflects rental appreciation/drop. However, in a few select cases, we haveobserved that the average rent per square foot moves due to a change in the mix of apartments within thatlocality (e.g. if the ratio of premium apartments, which command a higher per square foot rent, changes overthe quarter). In these few circumstances, the Rent Monitor will, in turn, reflect this input. Such changes havebeen 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 yieldpercentages across various localities. Gross yield is a ratio of average annual rental value to the averagecapital value of the property.
5. Capital Value Tables (given in Annexures) This shows the actual range of prices within which propertieswere available in each locality in the quarter. Prices are shown in Rupees per square foot basis, these are theprevailing rates for properties in each locality.
6. Demand Analysis This analysis of consumer demand is based on searches and requirements that usershave performed on Magicbricks.com. The top localities by demand gives an insight into consumerpeferences. The demand data has been used to arrive at various aspects of consumer requirements includingBudget-wise analysis, Property type analysis and BHK configuration analysis. This section also provides acomparison between demand and supply in the Apr-Jun 2014 and Jul-Sep 2014 quarters.
7. Editorial Speak PropIndex has gone from strength to strength adding more analytics, insights anddiverse views in every edition. To enhance the insights provided by our data PropIndex now includes cityperspectives from editors of Times Property.
GLOSSARY & DEFINITIONS
In the Oct-Dec 2014 quarter, theNational Property Index (NPI)rose by 1 per cent over theprevious quarter. Out of the 11 cities tracked in India, sevenposted a rise of 1-3 per cent in theCity Index value. This kept theNPI positive.
Ahmedabad posted the maximumrise of 3 per cent in the CityIndex, followed by Kolkata,Chennai and Hyderabad whichrecorded a rise of 2 per cent.Bengaluru, Pune and Noida notedmerely 1 per cent rise. However,Gurgaon and Ghaziabad remainedunchanged. Delhi and Mumbai,the major metropolitan cities, sawa drop in the City Index value by 1 per cent.
The National Consumer Budgetpreference graph shows thatdemand for properties in therange of Rs 20-50 lakh remainedstrong and increased by 3 per centin the last six months. On theot