Indian Real Estate Report Apr-Jun 2020

99ACRES' OUTLOOK

The Apr-Jun 2020 quarter presented India’s residential market with a unique challenge as the outbreak of COVID-19 brought construction activities and property sales to a halt. The short-term relief measures introduced by the government, such as identifying the event as Force Majeure, extension of project completion timelines, a six-month loan moratorium to homebuyers, and promotion of affordable and rental housing, among others, helped the market absorb the lockdown shockers to some extent.

While property sales plummeted by 80 percent in April and May, YoY, new launches suffered a setback of nearly 75 percent, as compared to the Jan-Mar 2020 quarter. Delhi NCR, Mumbai and Hyderabad saw new launches dipping by 80-95 percent, each, QoQ. Cumulatively, the period saw the addition of a mere 1,400 units across cities. The ensuing credit crunch faced by both buyers and developers is expected to shrink housing sales from 4 lakh units in 2019-20 to 2.8 lakh units in 2020-21, across the metro cities. An immediate impact on property prices was not apparent since all metro cities reported status quo in average weighted capital prices, barring Delhi where property rates dipped by a marginal one percent, QoQ.

The pandemic forced the realty sector to undergo a sudden digital transformation as developers shifted to virtual tours and offered discounted schemes to close deals online. The tenant community faced a shift in sentiment in favour of owning a home and the much-rooted-for commercial segment – co-working – felt the need for massive design alterations to meet with social distancing norms. However, with the crisis ripping the industry of a speculated Rs 1 lakh crore by the end of this financial year, these transformations are much required to ensure sustenance.