Analysts say smaller property markets will take longer to revive
Another 8-9 months!As sales of residential properties start to pick up in the metros and other large cities, smaller cities such as Pune, Nagpur, Jaipur and Mysore are far from showing any signs of recovery.
Analysts say the smaller markets, where real estate prices have crashed 30-40% since mid-2008, will need another eight-nine months for demand to start reviving.
Oversupply:“There is a huge problem of oversupply in these cities because developers constructed more than what was required in the boom time,” said Sunil Mantri, founder of Sunil Mantri Realty Ltd. “These are investor-driven markets and they took a beating when investors exited. Real buyers are still waiting for further price correction.”
Overpricing:Analysts also blame overpricing of properties in tier II cities while not matching the facilities available in larger cities.
Recovery Pattern!There is a pattern in any housing market recovery, said Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, a property advisory firm.
"Demand first comes back in the central business district in tier I cities and then in suburban districts, and then later in tier II and tier III cities," he said.Among the smaller cities, Pune real estate market is leading the recovery followed by Ahmedabad along with Kochi and Coimbatore, he added.
Pune retail real estate market:The retail property segment, too, has been hit hard in the smaller cities. In Pune, 15 shopping malls were announced in the past year but only three are coming up.
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