New Delhi: Consistent revival of demand in the Indian realty landscape on the back of conducive government policies and multiple incentives rolled out by developers has led to a 20% year-on-year (y-o-y) hike in sales of housing units in January-March 2021, according to a 99acres.com report published on 14 April.
Hyderabad and Bengaluru reported relatively slow recovery due to the resurgence of covid; however, Chennai and Kolkata surpassed pre-covid demand levels. Delhi-NCR, Mumbai and Pune showed consistent growth despite the second wave of covid-19 in March 2021, the report says.
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Maneesh Upadhyaya, chief business officer, 99acres.com said, “The first quarter of 2021 witnessed a resurgence in sales volume across metro cities, particularly Pune and Mumbai, amid a stamp duty cut till March. In line with the recovering market sentiment, site visits and sales, pricing power returned to sellers. Based on properties listed on 99acres, none of the eight metro cities recorded a downward revision in average listing prices of residential apartments in Jan-Mar 2021 against the previous quarter. Buyer responses also reported a 7% surge in the same period on 99acres. Owner listings posted on 99acres also went up by 20% in January-March 2021 against October-December 2020.”
“The green shoots of recovery seen so far will have to stand the test of time as there is a steep surge in covid-19 cases and the resultant restrictions in some cities may impact economic recovery, project construction timelines and buyer site visits. Fingers crossed as we enter the new financial year,” he added.
New launches between January and March 2021
The quarter witnessed the launch of about 600 new residential projects in the top eight metro cities. Despite an increase in covid cases, Mumbai led all cities for the third quarter in a row with a 38% share in new and relaunched projects. Hyderabad surpassed Pune and took the second position with a 21% share. Interestingly, Delhi NCR again contributed the least with a 3% share in the overall new unit additions.
Housing choices between January and March 2021
In the first quarter of 2021, Delhi and Mumbai top the chart for luxury housing. Most of the demand for property priced more than Rs1 crore was driven by these two metros, followed by Bengaluru, and Hyderabad. However, understandably, affordable housing (within Rs40 lakh) remained the most popular choice with Kolkata leading the demand followed by Chennai, Ahmedabad, and Pune. Bangalore saw the least demand for affordable houses while it leads to maximum demand for mid-income housing (within Rs40 lakh- ₹1 crore).
Ready homes or projects nearing completion continued to be the prime choice of homebuyers, and thus commanded a premium. The premium market picked up some pace, especially on the back of NRI demand in cities such as Bengaluru and Pune,” said the report.
Prices between January and March 2021
The average property prices went up by 1% across cities such as Chennai, Hyderabad, Kolkata and Ahmedabad, and maintained status quo in Delhi-NCR, Mumbai, Bengaluru, and Pune. The rental market continued to be grim as the slightest hope of reopening of offices and educational institutions was killed by a fresh spike in covid cases. With vacancy rates rising consistently across cities, rental values suffered a dent of 10-15%, y-o-y. The fast-paced dissemination of the covid vaccine, however, may turn the tables in the next two quarters for rental spaces, said the report.
“Driven by stamp duty rate cuts, discounted deals and an all-time low in home loan interest rates, property sales continued to rise in Q4FY2021. Of the 25,500 housing sales in the period, Mumbai and Pune accounted for the maximum share as homebuyers rushed to book the benefit of reduced stamp duty rates until 31 March 2021. Chennai and Kolkata closely followed and registered healthy sales conversions in the quarter. End-user demand thrived across cities, especially in relatively affordable pockets, which offered homes priced within Rs75 lakh,” said the report.