The second wave of COVID-19 hit housing sales with tier I cities recording an 18 percent decline in sales at 57,093 units in the June quarter (Q1 FY 21-22) from the previous quarter when the sales were 69,691 units, an analysis by Liases Foras has suggested.
Consolidated tier 1 cities’ unsold stock marginally declined by 1% on a quarter-on-quarter basis and 6% on a year-on-year basis. The current unsold across the top eight cities stands at 905,531 units with 48 months of inventory overhang, per the Residential Real Estate Market Report Q1 2021-22.
Prices remained stagnant in tier I cities on QoQ and increased 2% on a YoY basis, it said.
On a quarter-on-quarter basis, Tier I cities had recorded sales of 57,093 units in the June quarter (Q1 FY 21-22) which is an 18% decrease compared to last quarter when the sales were 69,691 units.
"There was just an 18% decline in housing sales when almost half of the quarter was under a lockdown due to the second wave. This augurs a strong undercurrent of end-user demand. However, inventory overhang is still 48 months, which suggests prices will continue to be under pressure, especially for under-construction projects," said Pankaj Kapoor of Liases Foras.
Sales witnessed maximum loss in NCR by 30%, followed by Ahmedabad (24%), Kolkata (24%), Hyderabad (17%), MMR (17%), Pune (16%), Chennai (12%), and Bengaluru (9%), it said.
However, on a year-on-year basis, overall sales across tier I cities increased by 116%. Sales witnessed maximum recovery in Bengaluru by 201%, followed by MMR (134%), Hyderabad (127%), Chennai (121%), Pune (119%), Ahmedabad (79%), NCR (64%), and Kolkata (56%) on YoY basis, it said.
On a quarter-on-quarter basis, sales in NCR decreased in the quarter by 30%. The maximum loss in sales was witnessed in Faridabad at 48%, while in Bhiwadi, deals stayed low at 260 units. Maximum sales occurred in Gurugram and Greater Noida. Unsold stock reduced in all suburbs except Noida where it rose by 2%.
On a year-on-year basis, sales witnessed a 64% Increase in NCR. All suburbs showed a significant amount of growth in sales when compared on a YoY basis. Unsold stock shrunk in Bhiwadi by (-15%) and Gurgaon by (- 14%), respectively, while it increased in Faridabad by 15%.
Unsold Stock in Major Cities of India
Consolidated tier 1 cities’ unsold stock marginally declined in Q1 FY 21-22. The unsold stock increased in Chennai by 4% and Hyderabad by 2% while it declined or remained nearly stable in all other cities. Bengaluru witnessed the maximum reduction in unsold stock by 7% on a quarter-on-quarter basis.
On a year-on-year basis, unsold stock in Tier I cities decreased by 6% in June 2021 compared to the same period last year. Ahmedabad witnessed the maximum decline in unsold stock (15%), followed by Bengaluru (13%), Kolkata (11%), Pune (7%), NCR (7%), and MMR (3%). The unsold stock increased in Hyderabad by 16% and in Chennai by 1%, the analysis said.
Months Inventory in Major Cities of India
The months' inventory increased by 23% across Tier I cities and is standing at 48 months in June 2021. Inventory overhang in Bengaluru and Hyderabad are lowest among the tier 1 cities at 28 and 30 months, respectively. In Bengaluru, the months' inventory stayed at 28 months in the quarter and became the city with the least months inventory on a quarter-on-quarter basis, the report said.
On a year-on-year basis, the overall months’ inventory decreased by 56% on a YoY basis. In Bengaluru, it decreased by 71%, followed by MMR (59%), Pune (57%), Chennai (54%), Ahmedabad (53%), Hyderabad (49%), Kolkata, and NCR each by 43%.
Movement in Price in Major Cities of India
In Q1 FY 21-22, the weighted average price across Tier I remained stagnant. Prices remained unchanged in Bengaluru, Chennai, Kolkata, and NCR. Prices in Ahmedabad increased marginally by 3%, while it increased by a percentage in Hyderabad, MMR, and Pune on a quarter-on-quarter basis, the analysis said.
On a year-on-year basis, the weighted average price across Tier I cities increased by 2% compared to a year ago. Prices increased by 5% in Hyderabad, 4% in Ahmedabad, and 2% in NCR and Pune. Prices dipped in Kolkata (2%) and Chennai (1%). Prices in MMR and Bengaluru remained stagnant, it said.