IGI Logo

Mumbai, 4 th October 2021: Knight Frank India, leading international property consultancy, today launched a special report - India Real Estate Update (July – September 2021) - which analyses the residential and office market performances across eight major cities for the Q3 2021 period. The report estimates that home sales volume grew by a considerable 92% (YoY) to 64,010 unitsin Q3 2021. New residential unit launches increased by 90% (YoY) to 58,967 units in Q3 2021. A significant recovery compared to 27,232 residential unit launches and 27,453 residential unit salesin the previous quarter.

Weighted average prices across markets remained stable in Q3 2021 and did not decline compared to the preceding quarter. The Chennai, Hyderabad and Kolkata markets saw prices increase marginally on a YoY basis during the quarter.

Stamp duty cuts have proved to be an effective demand stimulant in the case of Mumbai, Pune and Kolkata where the state governments have applied a broad-based cut across ticket sizes in the primary market. On the supply side, developers have responded well to the shift in homebuyer sentiment and pursued an aggressive pricing strategy over the year with spot discounts, financing deals, stamp duty waivers and other freebies to entice buyers.

The total residential sales of the top eight markets under review during Q3 2021, reached 104% of 2019 quarterly average. Similarly, residential launches in Q3 2021, improved to 106% of the 2019 quarterly average. Demand momentum was strong across markets in Q3 2021 with all markets reporting a YoY growth in sales. Mumbai and Bengaluru, which account for over half the inventory in the market, saw sales grow by 109% and 131% YoY respectively during this quarter.

The share of sales in the ticket size INR 5 - 10 mn grew to 35% in Q3 2021 compared to 32% a year ago. This can be attributed to the homebuyers’ need to upgrade to larger living spaces with better amenities. The share of home sales in the under INR 5 mn ticket size category dropped to 43% in Q3 2021 from 45% a year ago as the income disruptions caused by the pandemic were more keenly felt by the lower income demographic.

TABLE I: SALES IN UNITS

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “There has been an exciting improvement in sales and launches in Q3 2021. Sales momentum that picked up in the beginning of the year has sustained in Q3 2021. The market seems to have factored in the very low likelihood of a complete lockdown as was seen last year due to the ample availability of the COVID vaccine. Comparatively lower residential prices, attractive interest rates and higher household savings rate over the past year should support housing demand going forward. With the upcoming festive season, the market is gearing up for new project launches and consumers are likely to reciprocate. While financial stress remains a significant factor for developers across markets, homebuyers’ preference for grade A developers and their access to cheaper credit has positioned them well in this recovering market.”

Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India said, “Stamp duty cuts were a significant intervention applied by several state governments to spark a sharp recovery in sales volumes. These measures have convinced the fence sitters to make the home buying decision. Going forward with the economy improving, interest rate remaining low and overall affordability improving, the sweet spot for home buying will be sustained Given the strong positive impact of real estate sector recovery on overall economy, the Central and State Governments should look at policy measures to further stimulate housing demand.”

TABLE II: LAUNCHES IN UNITS

TABLE III: AVERAGE YOY PRICE CHANGE ACROSS MARKETS DURING Q3 2021

KEY HIGHLIGHTS OF RESIDENTIAL MARKET SUMMARY Q3 2021

1.Hyderabad and Kolkata have seen the strongest recovery to pre-pandemic levels in terms of sales as well as launches.

2. The stamp duty cut in West Bengal caused sales in Kolkata to spike 75% YoY to 6,861 units in Q3 2021

3. Bengaluru, India’s IT-hub, has also seen a strong bounce back in line with healthy growth in the IT sector.

4. Despite the withdrawal of the stamp duty cut window, Mumbai and Pune markets have continued their sales momentum after a brief dip in the second wave impacted Q2 2021.

To Read Complete Report & Disclaimer Click Here

Above views are of the author and not of the website kindly read disclaimer