There has been a correction of approximately 15% on an average in the capital values of land across NCR, and residential prices would remain under pressure, going forward, says India Residential Market Review: Quarter 3 2007, a report by Knight Frank.

The report also adds that Growing urbanisation will result in an incremental demand for housing in suburban locations of urban areas. As a result, close to 530.5 million sq ft of residential space would be developed in the grade A and B+ categories in NCR, Mumbai, Pune, Hyderabad, Bangalore, Chennai, and Kolkata. This translates into a supply of 200,000 units per year in MIG and HIG segments. About 26% of the urban population of India resides in these 7 cities.

The report says that in these housing segments, demand just about meets the supply and the residential values across the country will remain under pressure and going forward, some markets may even see a correction to the tune of 15-20% over the medium term. Also, this demand-supply match coupled with the recent hike in interest rates has kept a check on further price increase.

The report adds that NCR has a residential supply coming in by 2009-10, totaling to approximately 191.42 million sq ft. Of this, about 16 per cent shall come up in 2007 and 20 per cent in 2008. The maximum supply (122 million sq ft) will enter the NCR market in the year 2009-10. Significantly, around 58 per cent of this has already been booked.
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