Various measures by the central and the state governments to boost buyer confidence have led to home sales in eight prime residential markets showing a quarterly increase of 12 percent in the January-March (Q1) period of calendar year 2021, compared to the October-December quarter of 2020, a report by online property brokerage firm PropTiger.com has said.
According to Real Insight – Q1CY21, 66,176 homes were sold in the primary market in January-March 2021, when several state governments, including Maharashtra and Delhi, announced stamp duty and circle rate reductions.
However, when compared to Q1CY20, home sales declined 5 percent from 69,555 units, something that can be termed marginal, considering that January-March 2020 was the last quarter before the onset of the pandemic. The nationwide lockdown was announced late in March 2020.
Home sales in Hyderabad grew 39 percent YoY, followed by Chennai and Kolkata at 23 percent each. Delhi NCR reported a growth of 14 percent YoY, the report said.
“As the economy gradually marches towards recovery, and as global rating agencies and think-tanks revised India’s growth forecasts for 2021 and 2022, the residential real-estate market in the country is seeing a positive momentum on the back of various measures taken by the Centre and state governments, the RBI and the entire banking system (as demonstrated in home loan rate reductions),” it said.
“This positive change is visible in the first quarter through an increase in supply numbers, an indication that developers are more comfortable now with regard to liquidity support and buyer sentiment,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com
“Though the concentration of the recent surge in COVID infections in a few markets is a concern, we expect the residential market recovery to continue,” he said.
Supply increases 49% year-on-year
On the supply side, 53,037 units were launched across India during the three-month period. During this period, the Union Cabinet approved a bill to set up a Rs 20,000-crore development finance institution to offer long-term capital support for infrastructure development. This marked an annual growth of 49 percent in housing supply.
A quarter-on-quarter (QoQ) comparison shows a decline of 2 percent in new launches, compared to the last quarter of CY20.
Prices remained mostly stable, except in Ahmedabad and Hyderabad
No extraordinary upward movement was seen in the average prices of property in the primary or new-homes market. While the annual growth remained largely flat or in low single digits in most markets, Ahmedabad and Hyderabad stood out, with a 5 percent annual growth in the average rates of property.
“The Maharashtra government’s decision to temporarily lower stamp duty on property registrations helped mitigate the steep decline in sales for the Mumbai and Pune markets which contribute the most to the national stock of unsold homes. The state government should have continued it to keep the sales momentum going. We also expect states like UP and Haryana to reduce stamp duty and circle rates to provide support to the crucial housing markets of Noida and Gurugram in the National Capital Region,” said Mani Rangarajan, Group COO, Housing.com, Makaan.com and PropTiger.com
“In a show of great intent to help buyer sentiment, almost all banks have lowered home loan interest rates to the 6.9 percent level. We expect this low rate regime to continue as the Indian economy attempts recover from the pandemic-induced GDP contraction,” said Rangarajan.