News: Residential sales up 34% in top seven markets in Q3 2020: Report-28-09-2020
https://realty.economictimes.indiatimes.com/news/residential/residential-sales-up-34-in-top-seven-markets-in-q3-2020-report/78367287
Housing sales in top seven markets including Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata rose to 14,415 apartments, up 34% from the previous quarter, showed JLL India data.
MUMBAI: Indian residential property market turned more active during the quarter ending September as against the April-June quarter that was largely marked by lockdowns subsequent to the outbreak of Covid-19 pandemic.
Housing sales in top seven markets including Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata rose to 14,415 apartments, up 34% from the previous quarter, showed JLL India data.
Mumbai was the largest contributor to sales, accounting for 29% during the quarter, while 22% of sales were contributed by the Delhi-NCR. Growth in sales activity was also driven by stronger demand in Chennai, Hyderabad and Pune.
“We are cautiously optimistic about the residential market, driven by sales volumes in Mumbai and Delhi. A combination of favorable factors such as low mortgage rates, attractive prices combined with developers’ lucrative payment plans together reinforce the longer-term potential of the sector. For end users, the next 12 months are ideal to buy a house,” said Ramesh Nair, CEO and Country Head, India, JLL.
In the subsequent quarters, he believes, the translation of demand into sales will primarily hinge on enhanced consumer confidence that will depend upon the continued implementation of progressive government policies amidst the gradual revival of the Indian economy at large.
Residential market activity is also being supported by renewed interest from non-residential Indians (NRIs) during the quarter, resulting in more pent up demand in the market and increased enquiries received by developers.
“The further easing of lockdown restrictions and the upcoming festive season might help in bringing buyers back to the market. An assessment of years to sell reveals that the expected time to liquidate stock has increased from 3.6 years in Q2 2020 to 4 years in Q3 2020. While the residential space remains unpredictable, favourable supply dynamics could deliver potential upside for both homebuyers and developers in the medium-term,” said Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.
During the quarter, the focus of new launches continued on the mid-income and affordable segment. New launches were restricted at 12,654 units in the third quarter, a decline of 14% quarter-on-quarter as developers focused on completion of under construction projects and clearing their existing inventory.
Hyderabad and Mumbai accounted for over 60% of the total new launches in the quarter. The drop in new launches was driven by Bengaluru, which witnessed a substantial decline of over 80% as compared to previous quarter.
Development focus on mid and affordable segments continued with nearly 75% of the new launches in the sub Rs 1 crore category. Moving ahead, the focus on these price segments is expected to continue with developers looking to convert the strong pent up demand.
The quarter witnessed sales outpacing new launches as unsold inventory across the seven markets decreased marginally from 459,378 to 457,427 units. Mumbai and Delhi-NCR together account for more than 50% of the unsold stock that is at various stages of construction.
Residential prices remained largely stable across all the seven markets when compared to the previous quarter. However, developers in certain markets are providing moderate price discounts to kick-start sales, thereby facilitating cash flows to tide over the crisis in the short term. Moreover, developers are also offering flexible payment schemes such as no installments for a year and other schemes to attract prospective homebuyers who have stayed away from the market in the last few months.
