Realty cos to post mixed results in Q1

Apartment registrations in Mumbai fell by 25 per cent month-on-month in May to 5,337,the lowest in last 11 months. The decline is largely due to high property prices,which adversely affected affordability,he said. The National Capital Region (NCR),the other large real estate market,also experienced a similar trend,a Mumbai-based analyst,who declined to be named,said. Prices were 15-60 per cent higher in Mumbai during the quarter from that a year ago,while prices in NCR were higher by around 35-50 per cent during the quarter,he said.

DAMPENED QUARTER

Traditionally,April-June is a “subdued” quarter with no new launches due to the rainy season,Angel’s Desai said. Property absorption in India’s key metros registered a mixed trend in April-June. The quantum of new launches tapered down in comparison to that in second half of FY10 and the same quarter last year,Religare Capital Markets said in a note to clients.

In Mumbai,absorption declined month-on-month,as spiralling prices hit affordability,whereas southern cities and places like Gurgaon registered an uptick in absorption,it said. Companies like HDIL,Lodha Developers and Anand Raj Industries had key launches during the quarter. “We believe that our real estate universe may deliver some negative surprises in Q1FY11,given the absence of significant new launches and overall low construction activity because of the heat wave in north India,” Religare Capital said.

It expects Phoenix Mills and Indiabulls to “surprise positively”. A Mumbai-based analyst said that developers were focusing on execution of projects,which have been pre-sold. This would help in bringing in revenues,based on a percentage of completion method,in the quarter.

OUTLOOK

“With a robust economy and job market,we expect prices to remain robust and underlying demand steady (quarterly variations not withstanding)…,” Edelweiss Securitied said in its outlook for 12 months. There is an increase in construction activities,while non-resident Indian investors and speculators are returning to property markets,it said.