- The second wave of COVID-19 marred home buying sentiment in Apr-Jun 2021. Homebuyers took a back seat and avoided site visits amid restrictions on movement. Deals on the verge of finalisation were put on a hold. Overall, property sales dwindled by an average of 55 percent, QoQ, in top eight metro cities.
- The rental market received a significant blow yet again as the resurgence of COVID-19 delayed opening of offices and colleges further by at least two quarters. Average rentals in Delhi NCR, Mumbai, Bangalore and Chennai dipped to the tune of five percent, YoY. Any growth in the segment is unlikely until the markets reopen.
- High input prices and wafer-thin margins prevented price correction in the primary market. Ready properties or those nearing completion saw a notable spike in prices across Delhi NCR, Mumbai and Bangalore. The secondary market, however, witnessed some deals being negotiated at a 10-20 percent discount.
- New housing supply dipped significantly in Apr-Jun 2021 as against Jan-Mar 2021. Liquidity constraints and labour paucity marred the addition of new housing units and completion of ongoing projects across cities. On an average, Delhi NCR, Mumbai, Bangalore, Kolkata and Hyderabad saw new launches dwindling by 20-50 percent, QoQ.
* Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com
The Indian real estate sector was caught off-guard in Apr-Jun 2021 with the onset of the devastating second wave of COVID-19. A higher rate of infection and fatalities brought the real estate business to a near halt yet again. Homebuyers took a back seat and completely avoided any site visits, especially in Mumbai, Delhi NCR and Bangalore. Deals on the verge of finalisation were put on hold. The overall housing sales dipped by over 55 percent, QoQ. Developers also deferred new launches indefinitely and ongoing construction activities were paused as migrant workers moved places.
June onwards, property enquiries started resurging. Independent houses or floors with access to terrace were seen gaining preference. Buyers interested in gated societies were willing to push their budgets up for an additional room to accommodate prolonged work-fromhome requirements. The situation, however, does not look ideal for the residential rental and commercial real estate sector as reopening of offices was delayed further. On average, the residential rental market saw prices dwindling by about 1-3 percent, YoY.
The factors that kept the market afloat during the quarter were the governmental initiatives in the form of loan restructuring and tax rebates. The support provided to the developers for completing their projects in time is also expected to go a long way in maintaining the resilience of the market. Any price correction in the face of the crisis, however, has not been noted so far.