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Housing sales decline by half in 2020 compared to 2019; improvement in fourth quarter of 2020

While the housing sales numbers improved in the fourth quarter of 2020 on the back of low-interest rates, pent up demand, and the festive season, the year-on-year sales numbers were at least 47% less than 2019, a new report has said.

While sales improved during the last quarter of 2020, only 1,82,639 units were sold through the year compared to 3,47,586 homes sold in 2019 leading to a 47% decline in sales, a report by has said.

The maximum sales decline was witnessed by NCR at -54%. The micro-market saw 38,455 sales in 2019 and only 17,789 sales in 2020. Ahmedabad saw a 53% decline with 2019 witnessing sales of 25,734 units and 12,156 units in 2020. Mumbai too saw sales decline by 51% with there being 1,11,157 sales in 2019 and 54,237 sales in 2020, the report said.

On a quarterly basis, even though home sales in markets covered in the analysis declined by 27% compared to the December quarter of 2019, they showed a 68% improvement compared to the preceding quarter.

Except for Ahmedabad, home sales increased across all other cities when compared to the preceding quarter. Housing units in the Rs. 45 lakh and below category, accounted for 48% of the overall sales numbers during the quarter ended December 31, 2020.

Mumbai and Pune contributed over 50% of the sales during the quarter with 31% and 20% respectively.


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Developers launched attractive offers that effectively lowered the overall cost for buyers, prompting more people to invest in property during the festive season in 2020. Low home loan interest rates together with the lowering of circle rates by some states have also contributed to the improvement in the sales numbers.

After the RBI lowered the repo rate to 4% through consecutive rate reductions, most banks in India have brought the home loan interest rates to sub 7% levels. Maharashtra and Karnataka were also proactive in lowering stamp duties on property registration that provided a much-needed additional impetus to the residential sector in the aftermath of the pandemic.

New homes supply and sales showed a significant improvement in the fourth quarter of 2020 (Oct-Dec) in line with the ongoing economic recovery with government initiatives and increased market confidence providing an added growth impetus.

"All factors considered, the sector has shown remarkable tenacity in 2020 against unprecedented odds that have caused the economy to contract and impacted consumer spending. The fact that housing sales in India's key markets have started to bounce back, despite the general gloom caused by the pandemic, shows the immense potential of the real estate sector, which employs the highest number of unskilled workers in the country,” said Dhruv Agarwala, Group CEO,, and

The sector's performance seems particularly impressive given that the pandemic has impacted the income-generating capacity of a large number of people. End-users and investors continue to feel confident about investing in real estate. Prices continued to remain stable and the overall outlook looks positive, he said.

Launches improve in fourth quarter of 2020

Only 122,426 units were launched in the entire 12-month period in 2020, about half the new supply in 2019 (244,256 units).

According to Real Insight Q4 2020, a quarterly analysis of India's eight prime residential markets by real estate brokerage firm, 54,329 new units were launched during the three months, amidst the phased easing of restrictions put in place in India as part of one of the most severe lockdowns in the world to contain the spread of the Coronavirus.

New launches grew by 173% quarter-on-quarter (QoQ) 19,865 units that were launched in the eight key markets during the July-September period. This also reflected a 12% year-on-year (YoY) growth over the 48,530 new units that were launched in the December quarter in 2019. This was the first quarter since the onset of the pandemic where we witnessed a YoY growth, signaling a turnaround in the market.

A city-wise break-up of launches also shows that there has been a quarterly increase in the October-December period across markets, barring Ahmedabad.  Hyderabad, Pune, and Mumbai were the top three cities in terms of new launches.

Units in the sub-Rs 45-lakh category were the largest contributor to the overall supply, with nearly 46% share, followed by the mid-segment, which contributed 25%.

The spike in supply numbers could be attributed to the increase in home-buying interest in the aftermath of the coronavirus pandemic and also the fact that new launches were muted over the prior three quarters. Some cities like Mumbai and Pune, driven by stamp duty cuts by the Maharashtra government, overall low-interest rates, stagnant housing prices, and attractive offers by developers.

"While the trends point to market recovery and positive news given the imminent launch of a vaccine that will ease the pandemic concerns, our optimism should be cautious. Buyers continue to expect low home loan rates, extension of developer offers and prefer ready to move inventory than those under construction,” said Mani Rangarajan, Group COO,, and

“We believe that the government should continue to support the sector through moves such as lowering stamp duty, re-evaluating circle rates, and increasing tax deduction limit for interest on home loans to ensure that the sector continues to revive. The sector is digitizing at a rapid pace and more than 90% of potential home buyers have moved online to shortlist properties to buy. We have seen strong growth in online booking throughout 2020,” he said.

Prices remained flat

The growth in average prices for newly-launched projects across the top-eight cities remained relatively flat, with prices being range-bounded. Prices increased in Ahmedabad and Hyderabad, by more than 5% year on year. The price growth in these cities could be attributed to increased demand from end-users for housing in specific locations.

Average prices have been flat in the NCR and MMR markets, the two strongest housing markets in the country.

Unsold stock reduced but overhang increased

Unsold housing inventory in the eight cities was at over 7.18 lakh units as of December 31, 2020, as compared with the unsold inventory of nearly 7.92 lakh units in December 2019, declining 9% on a YoY comparison.

However, because of a lower sales velocity in 2020 as compared to 2019, the average inventory overhang has increased to 47 months as of December 2020, as compared to 27 months in December 2019. Inventory overhang is defined as the time that builders would take to sell off their existing stock at the current sales velocity.

In keeping with past trends, Mumbai and Pune continue to hold the highest share in the unsold stock with developers. However, at 72 months, the inventory overhang is the highest in the NCR, while Hyderabad is the lowest at 29 months.

At 48%, the affordable segment contributes the highest share to the national unsold stock while nearly 19% of the total unsold inventory falls in the ready-to-move-in category

The cities included in PropTiger’s analysis include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi NCR (Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, and Faridabad) and Mumbai MMR (Boisar, Dombivli, Mumbai, Mazagaon, Panvel, Thane West), and Pune.
Moneycontrol News
first published: Jan 11, 2021 12:14 pm

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