Home sales across the country's top eight micro markets grew 59% on a year-on-year basis in Q3 2021 on the back of support measures by the government and the banking sector, a report by PropTiger.com showed.
According to Real Insight (Residential) – July-September (Q3)2021, a quarterly industry report by REA India-owned online real estate company PropTiger.com, home sales in India’s eight leading markets have undergone a significant improvement during the July-September period of 2021 (Q3 2021) as demand for residences picked up post the second wave of the coronavirus pandemic.
The cities included in the 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.
A total of 55,907 new housing units were sold in these markets during the three-month period, showing an upswing of 59% when compared to the same period in 2020. On a sequential basis, home sales showed a much stronger growth of 250% with only 15,968 units being sold during the April-June period this year (Q22021), the report showed.
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According to the report, home sales and new launches have both shown a significant improvement in the period between July and September 2021, indicating that a turn-around for the real estate sector might be around the corner.
Numbers for new supply show three-fold jump over Q32020
After a prolonged period of decline, new supply in India’s eight prime residential markets also saw a remarkable upswing in Q3, showing a three-fold jump of 228% to 65,211units when compared to Q32020 wherein a total of 19,865 units were launched in these eight prime real estate markets, it said.
There was also a sequential increase in the new supply. A total 21,836 units were launched in Q2 of the calendar year, indicating a 199% jump in Q3. Of the total units launched in Q3, 33% were from the Rs 45-75 lakh price bracket, the highest number of launches seen in any segment during the quarter.
Mumbai (33%) and Ahmedabad (21%) saw the highest number of quarterly launches, the report showed.
Inventory overhang declines to 3.6 years; further improvement likely in festive season
As on September 30, 2021, builders in India had an unsold stock consisting of 7,20,519 housing units across the top eight residential markets.
Even though new supply added to the overall number of units available for purchase in the eight housing markets (unsold stock stood at 7,11,215 in Q22021), the inventory overhang during Q32021 declined to 44 months (3.6 years) from 48 months in the previous quarter.
This decline in the inventory overhang - the estimated period builders in a particular market are likely to take to sell off their unsold stock at the existing sales velocity - can be attributed to the upswing in demand during the quarter, which is likely to improve further in Q4. This may lead to a further reduction in the inventory overhang during the festive season.
While the NCR has the highest inventory overhang of 62 months, Hyderabad has the lowest inventory overhang at 25 months.
Price growth remains muted
As supply-side issues continued to adversely impact cost of building housing projects in the aftermath of the pandemic, all housing markets included in the analysis showed an uptick in average prices of flats and villas. On a pan-India basis, weighted average price stood at Rs 6,200 – Rs 6,400 per sq ft, a YoY change of 5%.
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Ahmedabad saw the highest upward movement in average prices of flats, with average price increasing to Rs Rs. 3300 - Rs. 3500 per square foot (psf) in Q32021, 8% YoY increase. This was followed by Hyderabad at 6% then Delhi NCR at 5% and Pune and Bengaluru at 4%, Mumbai and Chennai at 3%, Kolkata at 2% YoY change in weighted average price.
“It is now a well-established fact that the notion of property ownership has gained significant currency in the aftermath of COVID and its impact on the way people live and work. Even as this has helped build positive consumer sentiment vis-à-vis residential real estate, support measures by the government and the banking sector have set the ball rolling for a positive change in momentum for the sector,” says Dhruv Agarawala, Group CEO, Housing.com, PropTiger.com and Makaan.com
“The stage is now set for the festive season to give that much-desired fillip for the industry that it has been eagerly awaiting and working so hard for,” he said.