News: Residential sales back on track in first quarter, state realty reports-25-03-2021
Residential sales back on track in first quarter, state realty reports
Sale of residential houses in the first quarter of 2021 has shown significant recovery in terms of volume, according to the latest reports released by two real estate consultancies that pegged the recovery between almost 90% of the sales during the same period last year to a 29% increase, before the pandemic affected the sector.
As per the reports released by private consultancies JLL and Anarock, the maximum sales were recorded in the mid-segment and affordable categories, while the prices of properties increased by 1-2%.
“Housing affordability will potentially remain extremely favourable throughout 2021. If the current sops and incentives continue, we will see sustained vibrancy in the upcoming quarters as well and end-users will drive maximum demand,” said Anuj Puri, chairman, Anarock property consultants.
While the JLL report pegged the recovery in this quarter at 90% of the sales last year, the Anarock report stated an increase of 29% from the sales in the first quarter of 2020.
City-based developers also indicated that sales had witnessed a spurt, particularly in completed projects, wherein a majority of the buyers were end-users. The low interest rates offered on bank loans and availability of finished houses have boosted sales, they said. However, they said that property tax in the state, coupled with high circle rates, need to be rationalised to give further impetus to the market.
The report released by JLL on Thursday stated that residential sales in the first quarter of 2021 showed a recovery of more than 90% of the volume witnessed in the first quarter of 2020 in the top seven markets of Chennai, Hyderabad, Kolkata, Pune, Bengaluru, Mumbai Metropolitan Region (MMR) and Delhi-NCR. MMR accounted for maximum residential sales, with 23%, followed by Delhi NCR, which accounted for 21% of the total sales across the country.
The JLL report stated that 25,583 units were sold across the top seven markets, compared to 27, 451 units sold between January and March last year.
“The sustained growth in sales presents clear signs of demand and buyer confidence coming back to the market. This has been on the back of historically low home loan interest rates, stagnant residential prices, lucrative payment plans and freebies from developers and government incentives, such as the reduction of the stamp duty in some states,” said Samantak Das, chief economist and head of research, JLL.
The report released by Anarock on Wednesday was also bullish on housing sales in the first three months of 2021. Besides stating a 29% increase in sales, a 51% increase was recorded in new launches compared to the same period last year. It stated that 58,290 houses were sold in the top seven cities compared this year to 45,200 houses sold in the first quarter of last year.
The mid-segment housing saw the maximum new launches in the quarter with a 43% overall share, with the affordable housing segment accounting for 30%, the report said.
Praveen Jain, a city-based developer and vice-chairman of the National Real Estate Development Council (Naredco), said that the sale of houses witnessed a spurt but there was a need to reduce taxes and that the recent hike in stamp duty, particularly, should be rolled back. “Under-construction projects, which were witnessing almost no sales, are also being sought by buyers, who are looking to invest their money or want possession a few years later. The market, however, is being driven by end-users,” said Jain.
Another developer said that apart from rationalising taxes, the authorities must also make the registration of properties easier. “The new registration process takes a lot of time and needs to be streamlined on an urgent basis, particularly in new Gurugram, where the issue of property IDs has slowed down everything,” said Kamaljit Singh, vice-president, Bestech Developers.
The Municipal Corporation of Manesar (MCM), which has the majority of developing sectors in its jurisdiction, said that a nodal officer was appointed on Thursday to resolve the issue of property IDs. Munish Sharma, the municipal commissioner of MCM said that they would resolve the issue on a priority.
