- Home buying sentiment remained muted during April due to the nationwide lockdown; with enquiries picking up slight pace in June. Genuine homebuyers flocked the market looking for attractive schemes and discounts. NRI demand, too, resurged, with some conversions in the mid-income housing bracket across cities.
- While the negotiation window widened up to 10-15 percent across budget segments, any actual correction in prices was not noticed. Barring Delhi NCR, all metros maintained status quo in average weighted capital ‘asks’, QoQ. With wafer-thin margins at the hand of developers, any price correction in future is unlikely.
- Amid restrictions to move around, the rental market remained intact in Apr-Jun 2020. There was no movement in average ‘asks’ across cities, except for some discounts and leeway offered by property owners to support the tenants struggling financially. PG accommodations and guesthouses took the brunt as people moved to their hometowns due to an extended lockdown.
- New project launches remained nil during the quarter and progress on ongoing projects suffered on account of reverse migration of labourers and disruptions in the supply chain. Property owners unwilling to sell at a reduced price exited from the secondary market. Unsold inventory stood at 6 lakh units at the end of Apr-Jun 2020.
* Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com
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.