Housing sales fell by 7 percent in the second quarter of 2022 compared to the first quarter following an increase in interest rates impacting affordability, according to a report by PropEquity, a real estate data, research and analytics firm.
Home sales across Pune, Hyderabad, Bengaluru, Mumbai, Chennai, Kolkata, Gurugram, and Noida dropped in Q2 vs Q1 at -16 percent, -1 percent -4 percent, -1 percent, -17 percent, -28 percent, -28 percent, -35 percent, respectively. Only Thane saw an increase in sales at 3 percent.
As for prices, prices have started to pick pace with Gurgaon witnessing the maximum growth on Q-o-Q basis. Gurugram witnessed 15 percent increase in prices to Rs 11,517 per square feet from Rs 10,315 per square feet. On a y-o-y basis it saw a 12 percent increase in prices.
Chennai witnessed the highest appreciation of 15 per cent, according to the analysis. The weighted average price rose by 15 per cent in Chennai to Rs 6,744 per square feet in the June quarter from Rs 5,855 per square feet in the year-ago period.
Hyderabad too saw 12 per cent rise to Rs 6,472 per square feet from Rs 5,764 per square feet. The average prices in Noida rose 9 per cent to Rs 7,411 per square feet from Rs 6,791 per square feet. In Bengaluru, the prices were up 8 per cent to Rs 6,196 per square feet from Rs 5,760 per square feet.
Housing prices in Mumbai, Thane and Pune increased by 3 per cent. In Mumbai, the prices of residential properties rose to Rs 18,896 per square feet from Rs 18,259 per square feet, while in Thane, the rates appreciated to Rs 6,325 per square feet from Rs 6,165 per square feet.
Sales were impacted on account of the rising home loan interest rates over the last several quarters. Potential homebuyers found it challenging to find deals within their budget.
The total number of housing units launched across the top 9 tier cities witnessed a drop of 24% on a Q-o-Q basis, however, a growth of 51% was witnessed on a Y-o-Y basis.
Similarly, absorption saw a drop of 7% on a Q-o-Q basis, while a growth of 96% was witnessed when compared to the same period last year. The unsold inventory dipped by 5% when compared to last quarter and 11% drop when compared on a Y-o-Y basis, it said.
Also, the new supply or new launches of housing units decreased by 24 percent in the same period to 69,812 units from Q1 2022 at 91,489 units. New launches across Thane, Pune, Hyderabad, Bengaluru, Chennai, Kolkata, Noida and Gurugram fell -23 percent, -14 percent, -37 percent, -32 percent, -37 percent, -72 percent, and -100 percent respectively. Only Mumbai saw an increase in new launches by 10%.
“Residential market has been witnessing steady growth in sales and price appreciation over the last one year and the last five months have witnessed no major COVID-19 related lockdowns across India. This has led to developers holding off new launches to clear existing inventories. We believe in the upcoming festive season we will see many developers launching new projects especially in the mid and premium segment,” said Samir Jasuja, founder and managing director, PropEquity.
We have been witnessing strong queries from potential buyers for rightly priced and located properties. Lot of our customers are sitting on the fence for developers to announce some offers or schemes in order to take a home buying decision. Inflationary trends have impacted housing sales slightly but we expect market sentiment to tide over this in the next quarter, said Abhishiekh Andlay, founder of Andlay Estates.