The first quarter of 2010-11 has witnessed a mixed trend in property absorption, especially across the country’s prime locations  Growth in the real estateindustry tends to taper during the April-June quarter. Following the conventional norm, the first quarter of 2010-11 has registered a dip in property bookings due to spiralling prices and significant decline in new launches. Overall, April-June 2010-11 has remained sluggish for the housing sector.
Consider this: The country’s financial capital witnessed 5,337 property registrations in May, down by 25% month-on-month and the lowest in the last 11 months.
This considerable drop in apartment registrations is primarily due to high property prices, opine sectoral analysts. Prices of apartments surged by around 15-60% and 35-50% in Mumbai and the National Capital Region (NCR), respectively, during the April-June quarter as against the same period in the previous year.
Although the realty sector is likely to post a year-on-year growth, following low base in 2009, profit margins of developers may go down as maximum sales have been recorded in the mid-income sector that offer lower margins, says Param Desai, an analyst with Angel Broking, a reputed brokerage firm based in Mumbai.
Mixed trend
The April-June quarter also witnessed a mixed trend in property absorption, especially across the country’s prime locations. For instance, Mumbai recorded a substantial decline in realty absorption, while Gurgaon and cities in South India registered a rise in absorption.
Stumpy launch
Moving to launches, the quarter experienced plummeting quantum of new developments when compared to the corresponding period of 2009-10, points out Religare Capital Markets.
The sector registered key launches from real estate firms such as Lodha Developers, Housing Development & Infrastructure Limited (HDIL) and Anand Raj Industries.
According to property analysts, most developers during the said quarter were busy executing pre-sold projects, leading to a decline in new launches.
On the brighter side, Edelweiss Securities Ltd has predicted bullish road ahead for the sector on the back of robust economy and reviving job market. The well-known research and investment firm expects property demand to remain steady.
“Stable residential prices (except for a few markets), together with demand upswing in the commercial segment by end of this financial year is expected to drive the sector’s growth,” says Noida-based realty analyst Anuj Sharma.
To add to the sector’s joy, Edelweiss further stated that non-resident Indian investors and speculators are making a come back in the evolving property market.
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