Housing sales have increased by 12 per cent to 1,38,051 units during January-September period of the current calendar year from 1,23,725 units in the corresponding period of 2020, according to a report titled Real Insight residential Q3 2021 by PropTiger.com
The demand drivers over the last one year include low interest rates on home loans, stable housing prices in the last few years, discounts and special offers from builders to speed up liquidation of their stocks and stamp duty reduction by various state governments, including Karnataka wherein the state has reduced the stamp duty on property priced between Rs.35 lakh and Rs 45 lakh to 3% from the earlier 5%.
The adoption of work from home policy has also led to rise in housing demand. The belief in home ownership has gained momentum, even among young millennial who earlier were reluctant to buy homes, preferring the flexibility offered by shared living.
After the outbreak of the pandemic, the consolidation of housing demand towards big, listed and reputed developers has gained momentum. This is getting reflected in their quarterly sales bookings numbers.
Nevertheless, India’s residential market would still take some time to reach pre-COVID levels of around 3.5 lakh units of annual sales, the report said.
As for prices, they are likely to remain stable although there is upward pressure because of rising input costs. Some branded developers have raised prices, albeit marginally, to offset increase in input costs. The research indicates that demand for plots has improved across all major cities. Independent floors too are in demand in some cities like Delhi-NCR.
The demand is largely driven by end-users in affordable and mid-income segments, but luxury properties are also not lagging behind.
New launches have more than doubled to 1,40,087 units during January-September 2021 from 68,097 units in the year-ago period. Fresh supply has already crossed the annual figures for 2020 that saw total new launches at 1,22,426 units across eight cities.
New supply in the full 2021 calendar year is expected to reach near the pre-COVID 19 levels, it said.
“Driven by pent up demand and festive sales as well as gradual recovery in the Indian economy, improved job market and low interest rates, housing sales are likely to rise by 15-20 per cent above 2020 level during the current calendar year despite the strong second wave of the COVID pandemic. Property sales picked up from July onwards as the infection rates waned,” said Rajan Sood, Business Head, PropTiger.com
“Despite the revival in the residential real estate market, housing sales might still fall short of 2019 numbers. A lot is dependent on sales numbers in the ongoing quarter. As per market estimates, housing sales could rise by a high double-digit percentage during the October-December period of this year from 58,914 units in the same quarter last year,” he said.
In the 2020 calendar year, sales plunged 47 per cent to 1,82,639 units from 347,586 units in the previous year, mainly because of strict nationwide lockdowns to control the deadly coronavirus during April-June last year.
"The likely growth in housing sales augurs well for the Indian real estate market and the overall Indian economy. The contribution of real estate in employment generation as well as the country’s GDP is immense. So, the recovery in the housing market is the need of the hour," said Sood.
“We are seeing heightened property search activity on Housing.com which points towards a positive turnaround for the residential real estate market for 2021. Reflecting the optimism in the sector, Housing.com’s IRIS index, which is a leading indicator to assess the upcoming residential demand in the country, closed at an all-time high in September of this year”, said Ankita Sood, director and Head of Research, PropTiger.com, Housing.com and Makaan.com.
In case of Bengaluru, the online high-intent homebuyer activity in the city is already 90% closer to the historical peak of March 2021. Most of these property searches are concentrated in prominent commercial and residential locales such as Krishnarajapura, Whitefield, Varthur and Electronic City.
"The build-up of search queries suggests improving consumer sentiment in this end-user driven residential market, signaling a positive outlook for the year,” she said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
