Residential Property Sales: Residential sales across top seven cities record 124% on-year rise in July-September

Residential Property Sales: Residential sales across top seven cities record 124% on-year rise in July-September

Top seven property markets across India have recorded over 124% on-year jump in housing sales during the July-September quarter the country began to cautiously return to normal economic activities in various states supported by aggressive vaccination drives.

Sequentially too, residential sales for the quarter rose 65% to 32,358 apartments following the cautious unlocking of the economy, showed data from JLL India.

Record low home loan rates, sops offered by realty developers and growing need of home ownership as induced by the Covid19 also helped push the sales momentum after a lull April-June quarter that was marked by the pandemic’s resurgence and restrictions imposed by various state governments.

The robust performance in the September quarter helped drive residential sales during January-September by 47% from a year ago. This implies that the second wave had limited impact on sales in the first three quarters of 2021.

“Developers have already started launching optimal sized apartments to capture changing consumer preference across most of the cities. The Indian residential sector is expected to witness sustained growth in the coming quarters. The renewed buyer’s confidence has been instrumental in the recovery of the housing market in Q3 2021, which recorded good volume of sales and launches as compared to the same period last year and almost inching towards the pre-covid era,” said Siva Krishnan, Head – Residential, India, JLL.

Mumbai has consistently been the largest contributor to sales over the past five quarters. During the September quarter, Mumbai and Delhi each accounted for 21% of the total sales followed by Pune and Bengaluru. Recovery is well underway as sales surpassed pre-covid levels.

“Sales volume during the quarter surpassed the volume recorded in the pre-Covid period of Q1 2020 by 18%. At the same time, it is encouraging to note that the sales volume during the quarter is inching closer to the average quarterly volume of sales recorded in the pre-covid era of 2019, which stood at about 35,000 units,” said Samantak Das, Chief Economist and Head Research & REIS, India, JLL. “This certainly indicates that the market sentiments are improving compared to the previous year and bringing back buyer’s confidence in the market.”

According to him, further reduction in home loan rates coupled with the festive season and improved market sentiments augurs well for the residential sector.

The cities were quick to bounce back from the impact, bringing back buyer’s confidence into the market once the economy began to show signs of recovery and a growth trajectory for the future. The increased momentum of the vaccination drive has further aided in limiting the impact of the second wave.

The top seven cities witnessed new launches of 32,863 units during the quarter, up 21% sequentially. As the economy began to improve and with the festive season around the corner, developers continued to launch residential projects across the markets.

Most of the new launches in the markets of Bengaluru, Mumbai and Pune were in affordable and mid-income segments. Hyderabad continued to dominate new launches and accounted for about 29% of launches during the quarter.

Pune and Mumbai, which contributed 23% and 19% respectively to the overall new launches followed. The markets of Kolkata, Delhi-NCR and Pune witnessed a substantial increase in launch activities.

Development focus on mid and affordable segments continued with 77% of the new launches were in the sub-Rs 1 crore category.

Although the quarter witnessed healthy launches, these continued to remain below par when compared to pre-covid quarter of Q1 2020 (around 40,500 units) and the average quarterly launches witnessed in 2019 (around 34,000 units).

Developers remain cautious in launching new projects as they are focused on off-loading their unsold inventory and recovering sales volume of the past few quarters. Developers are largely aligning their launch strategies in sync with actual market demand, thereby keeping the market fundamentals robust.

Unsold inventory remained almost stable as demand and supply dynamics remained steady. An assessment of years to sell (YTS) reveals that the expected time to liquidate this stock has increased marginally from 5.2 years in Q2 2021 to 5.3 years in Q3 2021.

Sales of residential units has been on an upward trajectory and is projected to gain further momentum as the impact of the second wave wanes. Consequently, the market is expected to gain with YTS likely to decline over the short to medium term.

Residential prices in a majority of India’s residential markets have remained stagnant in the past few years. In Q3 2021, prices remained largely stagnant when compared to the previous quarter, across all the seven markets under review.

With the festive seasons around the corner, developers are now offering various discounts such as straight-up price discounts, deferred payment plans and other incentives like no pre-EMIs for under-construction properties, waiver of floor rise & car parking charges, free home furnishings, attractive gifts and so on to attract fence-sitters and prospective home buyers.

With the residential prices holding steady along with various incentives offered by developers, the residential market is likely to witness an upward trajectory.

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