After three waves of COVID-19, new project launches have again caught the fancy of investors. Out of the total 2.37 lakh homes sold in 2021 across the top seven cities, over 34 percent were newly-launched units. Hyderabad witnessed the highest absorption of newly launched homes while Mumbai Metropolitan Region( MMR) was the lowest, Anarock Research data has shown.
In 2019, the share of newly-launched homes in sales was lower. Of approximately 2.61 lakh homes sold in 2019, newly-launched homes accounted for approximately 26 percent. In 2020, of 1.38 lakh units sold in the top seven cities, 28 percent were launched during the year.
Hyderabad accounted for the maximum absorption share of new units among the top seven cities. Of 25,410 units sold in 2021 in the city, approximately 55 percent were launched in the same year. MMR saw the lowest absorption of newly-launched homes - of 76,400 units sold in 2021, just 26 percent were launched during the year. The remaining were old projects launched before 2021.
The top two markets of MMR and NCR saw the lowest absorption share of newly-launched units at 26 percent and 30 percent, respectively. If we compare it to 2019, this share has risen in both cities in 2021 but continues to be lower than in other cities.
Essentially, buyers in NCR and MMR are cautious and opt for either ready or nearing completion homes, despite the higher prices. As per ANAROCK Research, NCR and MMR together comprise a massive 76 percent share of 6.29 lakh delayed/stalled units across the top seven cities. These units were launched either in 2014 or before.
In MMR, of 76,400 units sold in 2021, approximately 26 percent were newly-launched. In 2019, of 80,870 units sold, 23 percent were newly-launched. In NCR, of 40,050 units sold in 2021, approximately 30 percent were launched in the same year. In 2019, of 46,920 units sold, the sales share of newly-launched units was 22 percent. Evidently, homebuyer confidence in this once highly troubled market is on the rise, it said.
"End-users with a preference for ready-to-move-in or almost-complete homes continue to rule the roost. However, the demand scale is shifting gradually. Among other things, the increased sales share of newly-launched homes heralds the revival of investor interest. This is significant - over the last 3-4 years, investors had more or less exited the residential real estate stage and were focusing on other asset classes,” said Anuj Puri, Chairman - ANAROCK Group.
“Also, well-capitalized branded developers with a reputation to protect have been ramping up their market share of new launches. Buyers are confident of such players' ability to complete their projects on time. In 2021, of 2.37 lakh new units launched in the top 7 cities, the share ratio of branded vs non-branded developers was 58:42; in 2015, the ratio was 41:59,” he said.
While the return of investors is positive from a sales point of view, an end-user driven market helps keep prices in check. As evidenced in the past, increasing investor activity can lead to faster price hikes, it said.
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