This festive season, compared to the last festive season, was not that great and we also saw 11% decline in terms of new launches during the first half. Having said that, there is a good pipeline that the majority of the top 10 listed developers have announced. If we have some kind of check on further price appreciation, the momentum would continue and it is not only about pricing that has gone up. The sizes of the apartments have also increased by 10% to 12% over the last three to four years. That is making the ticket size much bigger compared to the earlier peaks.
Help us understand the anomaly that you are currently spotting here because MMR seems to be the only region where the number of units sold in the first half of this fiscal has already exceeded the first half of FY24; however, despite the maximum volume growth year-on-year, the average ticket size has remained the same at about Rs 1.47 crore. Why has not an uptick in demand led to an overall rise in prices too?Prashant Thakur: As I mentioned earlier, we have already seen a price appreciation of almost 50-60% across the top seven cities. Now, if you have to talk about MMR alone, from 2020 till date, we have seen a price appreciation of 53.6%. In my opinion, developers have been very sensible in kind of being very cautious about any further price increase because any further increase from here would break that affordability equation and that is where the end users will start to retreat from the market. And what we have noticed that during…We got cut off with that line but continue with what you were saying.Prashant Thakur: Post Covid, we have seen a steep surge in price and to answer the question that why we are not seeing any further increase in the ticket size in Mumbai, Mumbai itself has seen almost a price of appreciation of 53% post Covid, it is a steep rise and any further increase from here on would disturb the affordability equation for the end users and what we have seen is that post covid 75% to 80% of the home buyers are end users who are price conscious. So, I would give credit to the developers that they have maintained that discipline in terms of not exceeding the price beyond the affordability of the end user and that is where the prices have started to stabilise. I would not say that I expect any kind of price slowdown from here, but the stability would continue and that is a good sign for the momentum to continue during the second half of fy25. What about the NCR area because that has seen a pretty strong jump in terms of pricing. We have seen DLF, Prestige Estate investments in the NCR region. What is the outlook in terms of that becoming the new super hub for real estate players?Prashant Thakur: The NCR has seen a price appreciation of almost 57% to 58% which is quite steep and the reason for this steep increase was that for a very long period of time, the NCR market was stagnant and there were very limited grade branded developers in that market. When reputed developers like DLF came out with their super luxury and luxury launches, it was received very well and we saw a huge amount of price appreciation, thanks to good NRI and investor participation. We have seen that all the big boys of the south like Sobha, Prestige are also launching their projects in the Delhi-NCR market. Considering its strategic location in the north, this market will continue traction but there is a slightly cautious note I would take that the prices have already appreciated significantly. During the third quarter of CY24, close to 6 000 units were launched in Gurgaon and none of the units were below Rs 3.5 crore. So, one can very well imagine that the core market of affordability or budget segment has vanished. Any further increase over there in terms of price would be detrimental for the momentum to continue. We are seeing good participation from grade A and reputed developers with pan-India presence like Godrej, Prestige, Puravankara, they are kind of planning which is a welcoming change for a market like ncr which was dominated by a host of local players.
What about the specifics in Bangalore because in percentage terms, that is where the massive rerating is. Is it largely because in the last 10 years nothing happened and so it has gone up? Or this is the new trend that has started there?Prashant Thakur: In Bangalore, we have seen a huge amount of premiumisation is happening. People have stretched their budget and a good part is in office leasing which has also taken a substantial uptake and we are seeing a good number of GCCs being set up. That is where the IT population is and startups are also going out and buying.
Bangalore was primarily a market which used to be in the range of Rs 85 lakh to 1 crore for a very long period of time. With income level going up and the signs of a good number of GCCs being set up, people are going out and buying. There also we have seen a price increase. And the main reason for the ticket size to increase over here is that people are opting for bigger units.
Bangalore remains a very healthy market. Even during COVID, we saw a good amount of traction here. Bangalore is the only city in India where the inventory overhang is less than 10 months. It stands at eight months. So that signifies the momentum that we have in spite of the prices running up so high. One reason the Bangalore market has become more resilient is because we have a good amount of grade A developers there who have had a track record of timely delivery and good post-sale services. Plus the population base is also quite tech savvy, the risk taking appetite is good and the population of younger generation going out and buying is quite high, enabling these millennials to extend their budget because they have a longer runway for loan servicing.