The phased lifting of lockdown restrictions in Q3 and Q4 2020 has positively impacted the housing sales across the top seven cities in India, reveals a residential research report by JLL. While some cities reached nearly 90 percent of the pre-COVID-19 sales, others surpassed these figures.

All-time low home loan interest rates, competitive pricing strategies and attractive payment schemes by developers coupled with government schemes have led to over 90 percent of sales recovery across the top seven cities in Q1 2021 against the same period last year, highlights the JLL Residential Market Update. Chennai, Hyderabad, Kolkata and Pune accounted for the maximum residential hike YoY and exceeded their pre-COVID-19, i.e. Jan-Mar 2020, levels.

Overall, the annual sales across the Indian housing market increased by 17 percent in Q1 2021. The sales volumes also improved significantly during the quarter, depicting the optimistic market sentiment.

The fiscal impetus from the Government, reduced home loan interest rates and low-risk mortgages coupled with the deal-sweeteners and flexi-payment schemes from developers helped offload a major portion of the unsold inventory in 2020. In FY 2022, the new supply of affordable projects will nudge fence-sitters to translate into actual home buyers. The existing homebuyers will opt for upgradation to spacious apartments in the wake of the new normal where work, study and fitness prevails from home.

Niranjan Hiranandani, National President - NAREDCO and MD- Hiranandani Communities


City-wise sales activity

Chennai: As per the JLL’s research report, the residential transactions in Chennai in Jan-Mar 2021 were up by nearly 130 percent YoY. The suburban localities in the southern quadrant of the city such as Perungudi, Medavakkam, Navalur, Thalambur and Nanganallur  accounted for nearly 60 percent of the overall residential offtake in the quarter. Sales volume in the city also improved significantly by 28 percent QoQ in Q1 2021.

Hyderabad: The metropolitan was the second in the pack with around 123 percent growth in the annual housing sales. Suburbs to the West, such as Gachibowli, Manikonda and Kukatpally, which also double up as Hyderabad’s prominent IT hubs, held over 65 percent of the market demand. In terms of sales volume, the city witnessed around four percent growth, QoQ.

Kolkata: Housing sales in Kolkata grew by 105 percent in Q1 2021 against the same period last year. The city, in fact, witnessed the steepest elevation in the sales volumes, i.e. over 200 percent QoQ. Around 1,300 units were sold in the metropolitan in Jan-Mar 2021, compared to about 440 units in the Oct-Dec 2020 quarter. The major contributors to this growth were southern suburbs such as Joka, Kasba, Behala, Jadavpur, Tollygunge and eastern suburbs such as EM Bypass, Rajarhat, Topsia. These localities accounted for around 70 percent of residential sales in Kolkata in Jan-Mar 2021.

Pune: In Pune, areas such as Viman Nagar, Kharadi, Wagholi in the East and Hinjewadi, Wakad, Baner of the West IT and commerce belt seized nearly 67 percent of residential sales volumes, which grew by approximately 13 percent QoQ. The housing sales in the city reached the pre-COVID-19 levels, with approximately 3,750 units being sold in the quarter ending March 2021.

Delhi NCR: The city accounted for 21 percent of the overall sales recorded across the top seven cities in the existing quarter. Around 5,450 units were sold in Delhi NCR in Q1 2021, which were about 92 percent of those in Q1 2020.

"Localities in the west, especially Dwarka accounted for the largest share of residential sales in Delhi. Approximately 30 percent of the overall transactions were propelled by payment schemes such as 30:70 scheme, and added goodies such as free parking offered by developers in this region. Meanwhile, Gurgaon, Ghaziabad and Faridabad also posted impressive numbers between Q4, 2020 and Q1, 2021, roughly another 40 percent of overall sales," avers Shashank Mishra, property consultant, Sahyogi Properties.

Mumbai: Housing sales in Mumbai accounted for 23 percent of the total market share.  Some zones that clocked phenomenal numbers were Thane, Mumbai suburbs and Navi Mumbai, which helped the city chart 84  percent YoY appreciation in sales. The transaction volume in the city surged by 15 percent in Q1 2021 vis-à-vis Q4 2020.

Bangalore: Bangalore was the only city to witness a negative movement in sales volume from Q4 2020 to Q1 2021, with a drop of six percent. The sales recorded in the city in Q1, 2021 were only 57 percent of those in Q1, 2020, posting a somewhat dismal performance compared to the other six cities.


City

Q1 2020 residential sales (no. of units)

Q4 2020 residential sales (no. of units)

Q1 2021 residential sales (no. of units)

Q1 2021 sales as a proportion of sales in Q1 2020

QoQ change from Q4, 2020 to Q1, 2021

Bengalore

         4,186

2,535

         2,382

57%

-6%

Chennai

         2,453

2,500

         3,200

130%

28%

Delhi NCR

         5,941

4,440

         5,448

92%

23%

Hyderabad

         3,027

3,570

         3,709

123%

4%

Kolkata

         1,259

438

         1,320

105%

201%

Mumbai

         6,857

5,026

         5,779

84%

15%

Pune

         3,728

3,323

         3,745

100%

13%

Total

      27,451

21,832

      25,583

93%

17%

Source: Real Estate Intelligence Service (REIS), JLL Research

New launches and unsold inventory across Indian markets

New projects that offer unobstructed views, in-house gyms, recreational rooms, game rooms, walking paths and landscaped gardens are gaining popularity right now. Moreover, since most people are working from home, there is a greater demand for larger spaces, mainly configurations above 2 BHK in the mid-income and affordable budget brackets.

Chintan Sheth, Director, Sheth Group

With a renewed focus on affordable housing, developers launched over 33,950 new units in the first quarter of 2021, a 27 percent spike over the previous quarter. The number of new launches in Q1 2021 was 84 percent of those in Q1 2020. Hyderabad grabbed about 25 percent of the overall new launches share, followed by Bangalore, with a 16 percent stake. About 70 percent of the fresh launches were within Rs 1 crore category.

JLL research reveals that new launches surpassed sales, as the unsold inventory across the top seven cities grew from 462,380 to 470,750 units from Q4 2020 to Q1 2021. About 70 percent of the unsold stock exists in Mumbai, Delhi NCR and Bangalore. The estimated Years to Sell (YTS), the current unsold residential inventory, has increased from 4.2 years in Q4, 2020 to 4.6 years in Q1, 2021.

Property prices have largely remained stagnant over the year, and the trend might remain so in the forthcoming months.  Developers are expected to capitalise on the current buyer confidence, focusing on increasing affordable and mid-budget stock while keeping the prices of existing inventory range-bound to maintain sustained growth in 2021.