Moneycontrol PRO
Upcoming Webinar:Watch a panel of experts discuss: Challenges of continuously evolving regulation for Cryptocurrency, on 7th July at 3pm. Register Now

COVID-19 impact: Housing sales fall 79% in April-June quarter

New launches witness dip of 81 percent in the second quarter of 2020. New launches in Mumbai down by 91 percent; Delhi-NCR sees a 75 percent decrease

With most cities in either a partial or full lockdown due to coronavirus, new launches dipped by 81 percent and housing sales by 79 percent in the second quarter this calendar. Only 19,038 units were sold during April-June this year compared to 92,764 units in Q2 2019, according to PropTiger.

Affordable housing continued to dominate the real estate sector accounting for a 44 percent share of all sales, PropTiger said in its report Real Insight Residential Q2 2020.

Sales share of branded developers increased, as per the report.

New launches also decreased significantly during this period as developers remained cautious with commercial activity across sectors slowing down. Launches decreased 81 percent during the quarter ending June 30 to 12,564 units from 65,240 units last year. The first half of this calendar year showed a similar decline with a 65 percent dip in new launches.

Bengaluru witnessed the maximum supply of new launches in this quarter, the report stated.


COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

New launches in Mumbai were down by 91 percent from 21,250 in Q2 2019 to 1,820 this year. New launches in Delhi-NCR decreased by 75 percent to 2,010 this year from 7,920 in 2019. New launches in Bengaluru were down 52 percent to 3,270 this year from 6,840 last year.

At least 61 percent new launches were in the less than Rs 75 lakh category, as per the report.

Inventory declines; overhang increases

When compared to the levels seen during the same quarter last year, the unsold stock also declined 13 percent in the eight cities, primarily on account of a fall in new launches. As on June 30, 2020, developers had an inventory of 738,335 units across these markets. At the end of Q2 2019, the unsold stock stood at 846,460 units.

At 56 percent, the Mumbai and Pune markets together contributed the highest share to this stock of unsold homes, followed by NCR (15 percent) and Bengaluru (10 percent).

Inventory overhang, however, increased to 35 months as against 28 months last year. Inventory overhang is the time developers take to sell off the unsold stock keeping in view the current sales velocity. At 53 months, the inventory overhang was the highest in the NCR market.

PropTiger also pointed out that nearly 20 percent of the unsold inventory is in the ready-to-move-in category.

Prices remain stagnant

Due to the strain from the demand side, price growth in India’s prime residential markets remained largely muted, with the majority of cities showing an annual growth between 1-3 percent in the past year.

Housing markets of Hyderabad and Ahmedabad, however, showed comparatively stronger growth, primarily on account of end-user demand in specific locations. When compared to the level seen in Q2 2019, weighted average price increased by 7 percent and 6 percent in Hyderabad and Ahmedabad, respectively.

Launches declined significantly across cities, especially in Mumbai, Pune, Kolkata and Chennai.

“The current pandemic is an unprecedented Black Swan event that is expected to contract growth in the global economy, including that of India. As anticipated, demand was adversely impacted due to economic uncertainty combined with growing unemployment; in fact, our recent Housing-NAREDCO buyer survey indicated buyers have pushed back their purchasing decision up to a year,” said  Mani Rangarajan, Group COO, &

While, developers are increasingly offering schemes such as flexible payment plans, selective discounts and price protection plans to attract buyers, developers are understandably cautious and are focused on completing existing projects, he said.

Delivery of existing projects may also get pushed back depending on how quickly supply-chain, labour availability and liquidity inflows are restored.  “We are unlikely to see new launches increase significantly for the next few quarters,” he said.

More than 90 percent of all real estate search and discovery has moved online, he added.
Moneycontrol News
first published: Jul 28, 2020 02:26 pm
ISO 27001 - BSI Assurance Mark