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Virus impact: Super large developers see average business dip by 39%; smaller developers took 19% hit in revenue

Sales in Tier 1 cities grew 22% between 2015 to 2019; during the same period, sales in Tier 2 cities grew 73%, from 59,390 in 2015 to 76,466 units in 2020, a report by Liases Foras said

Representative image

Representative image

Rather that consolidating, the realty landscape is broad basing. The share of top 50 builders dropped to 23% during the COVID-19 pandemic and so did their average business which declined by 39% compared to smaller developers who saw a decline in revenue by just 19%, a new report has said.

Data shows a steady increase in developers' number from 7,876 developers in 2015, growing over 50% to 12,249 by 2019. The number of builders has been increasing every year, except during CY 2020, which has reduced the number of developers with active supply mainly because of the COVID-19 impact. Instead of consolidation, the trend suggests that the real estate market has been broad basing all these years, says a report by Liases Foras.

The total sales value increased, but the share of top builders fell. The value of the stock sold also shows similar trends. From 2015 to 2019, the sales value increased by 20%, except during 2020 when the sales dropped by 31% due to the COVID-19 impact, says the report titled The Myth About Consolidation in Real Estate.

The value of sales also increased for small developers. When CY 2018 and CY 2019 are compared, the reduction in the value of sales within the super large developers and increase in the value of sales in smaller developers indicates that the dominance of super large developers in the market share is getting distributed to smaller developers, the analysis said.