Housing sales dropped 26 percent and new launches were down 51 percent in nine major Indian cities in the March quarter of the financial year 2020 when compared to the same period last year, says a report by online property brokerage firm PropTiger.com
As many as 69,235 units were sold during the quarter as against 93,936 houses during the same period in the previous fiscal, highlighting the knock the real estate sector has taken due to the coronavirus.
It was on March 25 that a nationwide lockdown began to check the spread of the virus. India’s confirmed cases are inching towards 22,000, with deaths at 681.
“The lockdown, which has virtually brought to a standstill most economic activity in the country, has hurt all sectors, including real estate. The adverse impact of the coronavirus is visible on housing sales in the last quarter of the last fiscal because March is usually one of the biggest months for sales,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com.
PropTiger is owned by Elara Technologies that also owns Housing.com and Makaan.com.
New unit launches fell 51 percent year-on-year because of the ongoing liquidity issues being faced by real estate developers, the report says.
Also read | Coronavirus lockdown: Should you invest in a property now?
During the three months between January and March, only 35,668 units were launched in the country’s top nine residential markets--Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Kolkata, Mumbai, Pune and Noida. In the same quarter previous fiscal, these markets saw the launch of 72,932 units.
On a quarter-on-quarter basis, housing sales fell 11 percent while launches declined 27 percent in the fourth quarter of the financial year 2020, the report said.
But, it didn’t drive down prices. Barring Gurugram, where prices fell 1 percent when compared to the March quarter last year, property values moved up in other cities, even if marginal.
At 9 percent, the highest annual appreciation in prices was seen in Hyderabad, followed by a 6% increase in Ahmedabad. Prices remained unchanged in Chennai. In other cities, the increase was between 1-4 percent.
The report covered Ahmedabad, Bengaluru, Chennai, Gurugram (including Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane), Pune and Noida (Greater Noida, Noida Extension and Yamuna Expressway).
The month of March was the poorest for sales because of the lockdown. As many as 26,126 units were sold in January against 19,122 in March.
While sales fell across cities, Gurugram saw the biggest drop of 73 percent year-on-year. Kolkata saw a 41 percent decline, Hyderabad 39 percent and Ahmedabad 36 percent.
Unsold inventory fell by 15 percent. The nine markets had 738,898 units unsold on March 31, 2020, a 6 percent quarter-on-quarter drop.
“No improvement, however, was seen in inventory overhang, which stood at 27 months, exactly the same as the past three quarters. However, when compared to Q4FY19, inventory overhang declined by two months,” the report said.
Inventory overhang is the time in months builders are expected to take to sell the stock, factoring in the current sales velocity.
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