Despite the COVID-19 pandemic, sales in the affordable homes segment have improved since July onwards, reflecting economic recovery in the real estate sector, according to the Economic Survey 2021.
"The total number of transactions for HPI@Assessment Price reduced by 71 percent from March 20 to June 20 on Q-o-Q (Quarter-on-Quarter) basis while on year-on-year basis transactions reduced by 67 percent from June 2019 to June 2020, indicating that COVID-19 crisis has significantly impacted the residential real-estate market. New listings were down significantly and buyers also reduced their home buying activity," the Survey said.
However, during the quarter July to September 2020, transactions for HPI@Assessment Prices have increased by around 150 percent on Q-o-Q basis. "...thus, it is observed that sales have retrieved in affordable segments, reflecting economic recovery in the real estate sector," the document said.
On the housing loan front, the Survey noted that housing loans growth decelerated to 8.5 percent in November 2020 from 18.3 percent a year ago. A significant fall has been observed in housing inflation from 6.7 percent in 2018-19 to 4.5 percent in 2019-20, and further to 3.3 percent in 2020-21 (April-December).
The National Housing Bank's (NHB) Housing Price Indices (HPIs) depict the measure of movement in residential property prices observed within a geographic boundary.
The NHB-RESIDEX captures two housing price indices -- HPI@ Assessment Prices and HPI@ Market Prices - Under Construction
Properties are based on the data available for 50 cities with quarterly updation.
The Survey noted that credit growth to commercial real estate and NBFCs declined in 2020-2021 from 13.6 percent in March 2020 to 5.6 percent in November 2020. It was at 8.9 ercent in March 2019.
The construction sector is also estimated to register a V-shaped recovery with a growth of 4.4 percent in the second half, the Survey said.
"The Economic Survey emphasises the V-shape recovery that India is witnessing and highlights the opportunities that have outweighed risks amidst the pandemic. Also, the economy is projected to post double-digit growth in the new fiscal 2021-2022," said Anuj Puri, Chairman - ANAROCK Property Consultants.
As per ANAROCK research, the first three quarters of FY 21 (April-December period) saw total residential sales of 93,150 units across the top 7 cities in which the festive period (Oct.-Dec.) alone accounted for a 55 percent share. Similarly, other service sectors namely financial and insurance have also gained momentum, thereby positively impacting the overall economy.