New Launches Back At 2015 Levels, Sales Sustain Momentum In Q2: PropTiger Report

As economic stability provides homebuyers with more confidence in their financial state, residential demand has picked up across the top eight cities, with both housing sales and new supply registering positive growth trend in the quarter ending April-June 2022 (Q2 CY2022).

According to Real Insight Residential – April-June 2022 report, a quarterly analysis of India’s top eight residential markets by REA-backed PropTiger.com, the recent spike in property prices has had little impact on homebuyer sentiment, as outlook towards overall economic scenario and income stability improve in the post-Coronavirus pandemic phase.

The markets covered in the report include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region, and Pune.

 “Even though the RBI increased the repo rate twice during the quarter to bring it to 4.90%, home loans remained largely affordable for the period analysed. The biggest booster to housing demand has been the increased importance of owning a property which has been further backed by the consumer confidence in the overall economic scenario and impending income stability,” said Vikas Wadhawan, Group CFO, Housing.com, PropTiger.com and Makaan.com.

Ahmedabad, Hyderabad shows highest sales growth

According to the report, housing sales during the quarter ending June 30^th, registered a sequential 5% uptick when compared to the previous quarter (Q1 CY2022). According to the report 74,330 units were sold across the top eight in Q2 2022 as compared to 70,620 units sold in Q1 2022. The sharpest sequential increase in sales was witnessed in end-user driven markets of Ahmedabad at 30% and Hyderabad, at 21%, respectively.

Source: Real Insight Residential – April-June 2022, PropTiger Research

New launches double in Kolkata

Growth in new supply   superseded sales numbers, registering a quarter-on-quarter growth of 28% with. 1,02,130 units launched in the second quarter as against 79,530 in the preceding quarter across India’s eight prime residential markets. New supply doubled in Kolkata on a quarterly basis, as per the report.

*Units converted to nearest thousands

Source: Real Insight Residential – April-June 2022, PropTiger Research

Property values spike across cities

At the same time, average values of new and available properties in the top cities registered an upward price movement ranging between 5% to 9% in this period. Rise in input costs, inflationary pressures and premium attached with ready-to-move-in inventory.  The price rally for the analysis period was sharpest for Pune and Chennai, at 9% (YoY) each, respectively.

*Weighted average prices as per new supply and inventory

Source: Real Insight Residential – April-June 2022, PropTiger Research

Inventory overhang at 34 months

The report highlights the current unsold stock in the country is at 7,63,650 units during this period, which will take approximately 34 months (2.8 years) to at the current sales velocity of the top eight cities.

*Units converted to nearest thousands

Source: Real Insight Residential – April-June 2022, PropTiger Research

“We see developers returning to the market in full swing in the second quarter of the year, thus, catapulting new supply back to the 2015 levels. Looking at the overall encouraging trends, we anticipate the sustained demand momentum to increase from strength to strength, especially amid the upcoming festive season which will push the growth trajectory further in the ensuing quarter,” said Ankita Sood, head of research, Housing.com, PropTiger.com and Makaan.com. 

Note: The YoY growth in Q2 2022 is multi-fold due the low base as Q2 2021 was a bottomed quarter owing to the COVID-19 second wave. Hence, in this case it is better to compare sequentially to get the true picture of how the residential markets have performed in the 2nd quarter of 2022.

- MakaanIQ

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Housing sales, launches improve in 2021 driven by policy initiatives and improved buyer sentiment: PropTiger.com report

Real estate activity in India’s leading housing markets intensified towards the second half of 2021, after a grim 18 months.

February 18, 2022: Real estate activity in India’s leading housing markets intensified towards the second half of 2021, after a grim 18 months in which Asia’s third-largest economy was consistently battered by multiple waves of the coronavirus pandemic, shows the latest report by PropTiger.com, the country’s leading online real estate brokerage company.

According to the report titled Real Insight Residential – Annual Round-up 2021, home sales in India’s eight prime housing markets increased 13% in 2021, when compared to the overall sales in 2020. The figures include the sales numbers for all the four quarters in both calendar years.

A much sharper growth was seen in terms of new supply in 2021 as against 2020---a total of 2.14 lakh units were launched in 2021 compared to 1.22 lakh units in the preceding year, showcasing an upward swing of 75%.

This improvement in key growth metrics for the sector, the second-largest employment generator in India after agriculture, could largely be attributed to support measures launched by the government in the aftermath of the coronavirus pandemic, improved consumer sentiment, stable prices and historically high housing affordability.

Mumbai, Pune steer sales upswing

Builders sold 2,05,936 housing units for the full year 2021 as against 1,82,639 units in 2020. This growth in sales was largely driven by India’s financial capital Mumbai, where a total of 58,556 homes were sold in 2021. Closely following the Maximum City was its neighbour Pune, where a 9% jump resulted in sale of 42,425 apartments last year, the report by the Gurgaon-headquartered real estate firm shows. 

Flexible payment plans continue to keep homebuyers inclined towards under-construction homes, which made up for 80% of the home sales during the year, the report adds.

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research

Buyer sentiment driving new launch wave

Amid a visible change of approach towards housing ownership among consumers in the aftermath of the pandemic, real estate developers in India stepped up efforts to offer better housing choices in 2021. As a result of this, barring Chennai where a marginal decline was seen, new supply showed a jump in all cities covered in the analysis during the year.

"Beyond the numbers which speak for themselves, what is remarkable is the resilience of the real estate market in India. Despite multiple waves of the pandemic, which resulted in multiple lockdowns, the residential real estate market has not only bounced back but is also on the cusp of a cyclical upturn. With policy support from the government and the low interest rate regime maintained by the RBI, I am very confident about the sector, entering into 2022,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com & PropTiger.com.

“Developers have been quick to respond to the positive changes in buyer sentiment, as evidenced by the offers available in the market, especially during the festive season of 2021, which resulted in improved metrics for both, demand and supply.  Basis the data available with us, it seems very likely that we will see an increase in prices in 2022, even as the inventory overhang continues to decline in 2022. The biggest trend we foresee is that the real estate market will continue to consolidate its growth in 2022 as well,” said Rajan Sood, Business Head, PropTiger.com.

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research

Increase in raw material price pushed property prices up in 2021

Consistent increase in raw materials prices is pushing up property prices, with all eight prime residential markets covered in the report showing annual increase in per square foot price of new properties. Ahmedabad and Hyderabad housing markets were leading this pack, with an annual price hike of 7% each in 2021.

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research

Inventory overhang declines to 3.5 years

The improvement in sales in 2021 has been instrumental in lowering the inventory burden for India’s real estate developers. Consequently, inventory overhang --- the estimated time builders would take to sell off the existing unsold stock, based on the current sales velocity--- has now declined to 42 months. As on December 31, 2021, builders had an unsold stock consisting of 7,26,943 units in India’s eight housing markets.  While the inventory overhang is the highest for the Delhi-NCR market at 68 months, it is the lowest for Kolkata, at 31 months. 

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research

NOTE: Housing markets covered in the report includes Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), MMR (Mumbai, Navi Mumbai & Thane) and Pune.

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Sales, Launches Increase In Q3 Amid Invigorated Buyer Interest: PropTiger Report

October 18, 2021: Home sales and new supply in India’s leading property markets have shown an improvement in the period between July and September 2021, at a time when economic growth also showed signs of stabilisation, after the second wave of the Coronavirus pandemic.

According to Real Insight (Residential) – July-September (Q3) 2021, a quarterly analysis of the country’s eight prime residential markets by online property portal PropTiger.com, builders sold 55,907 new housing units in the three-month period, much higher than what was seen in the April-June period this year as well as the July-September period in 2020.

Sales show quarterly as well as annual jump

Source: Real Insight (Residential) – July-September (Q3) 2021

The same is true of new supply numbers, shows the report that covers the housing markets of Ahmedabad, Bangalore, Chennai, NCR, MMR, Kolkata, Hyderabad and Pune, in its analysis. During the quarter-ended September 30, 2021, builders launched a total of 65,211 fresh units, a tremendous jump from the numbers seen in Q3 2020 as well as Q2 2021.

This drive in demand and supply numbers was majorly led by the mid-segment, where properties are priced up to Rs 75 lakhs.

The report by the REA India-owned PropTiger.com also predicts that numbers might see further appreciation in the ongoing festive season, primarily because of improved property affordability and renewed buyer interest in property ownership.

“It is now a well-established fact that the notion of property ownership has gained significant currency in the aftermath of COVID and its impact on the way people live and work. Even as this has helped build positive consumer sentiment vis-à-vis residential real estate, support measures by the government and the banking sector, have set the ball rolling for a positive change in momentum for the sector. In combination, these two factors have helped drive both, demand and supply, metrics upward during the July-September quarter of 2021,” says Dhruv Agarawala, group CEO, Housing.com, PropTiger.com and Makaan.com.

“The stage is now set for the festive season to give that much-desired fillip for the industry that it has been eagerly awaiting and working so hard for,” Agarwala adds. 

Inventory overhang down to 3.6 years

Another indicator that demand for property during the quarter improved in Q3 is the fact that inventory overhang - the estimated period builders in a particular market are likely to take, to sell off their unsold stock at the existing sales velocity - is now at 44 month as against 48 months in Q2. That said, as on September 30, builders were sitting at an unsold housing stock consisting of over 7.20 lakh housing units, the report shows.

Unsold stock: City-wise break-up

Source: Real Insight (Residential) – July-September (Q3) 2021

Price growth remains largely flat; Ahmedabad bucks the trend

Price growth in the cities covered in the analysis has remained largely flat. However, no depreciation was seen in any market either, when compared to rates prevalent in the same quarter last year. The muted growth in annual values of property can largely be attributed to the increase in building materials. Ahmedabad was an outlier, where average values of new properties increased 8% on an annual basis. This was primarily because of the low base rate in this city.

Price growth: City-wise break-up

Source: Real Insight (Residential) – July-September (Q3) 2021

*All prices are weighted average prices as per new supply and inventory.

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Unsold Stock Decreases But Inventory Overhang Increases in Q2 CY21: PropTiger Report

July 6, 2021: At a time when housing affordability is at a record high level, the second wave of the Coronavirus pandemic has thrown a spanner in the works, to adversely impact demand for property in India, data indicate.

According to Real Insight (Residential) – April-June (Q2) 2021, a report by online property advisory portal PropTiger.com, while the unsold housing in stock in India’s eight prime residential markets continues to be more or less at the same level as in 2020, the estimated time to sell off these units has increased significantly.

The eight residential markets covered in the quarterly analysis have a total of 7,11,215 unsold housing units, as on June 30, 2021. At the end of June 30, 2020, this number stood at 7,38,335 units. Now even though this is a four per cent annual decline in numbers, the inventory overhang has significantly increased when compared to 2020, a year when the first wave of the virus left India’s economy severely affected and Asia’s third-largest economy was much less prepared to absorb the shock.

At the end of June 2020, the average estimated time that real estate developers in India would have taken to sell the over 7.38 lakh units was 35 months. In 2021, builders are expected to offload the over 7.11 lakh units in 48 months.

Unsold stock: City-wise break-up

Source: Real Insight: Q2 2021

“While the impact of the second wave of the virus was universal, some markets were impacted more, as they were the hardest hit by the pandemic. This has been reflected in the high levels of unsold inventory and higher inventory overhang in markets like the NCR and MMR. This is especially true of the NCR market, where the inventory overhang was as high as the MMR, even though the unsold stock in that market was less than half of what is there in the MMR,” said Mani Rangarajan, group chief operating officer, Housing.com, Makaan.com and PropTiger.com.

Another indicator of the demand slowdown is quarterly sales, which have undergone depreciation across the eight cities in the April-June 2021 period, when most states used fragmented lockdowns as a remedy against the virus’ spread.

As many as 15,968 units were sold across these eight markets during the June quarter, showing a 16 per cent YoY decline and a 76 per cent quarterly fall.

The cautious approach builders showed during this period, also effectuated a fall in new launch numbers. A total of 21,839 new units were launched in Q2CY21, showing a decline of 59 per cent when compared to the January-March period of this year. However, when compared to Q2Cy20, new launches showed an increase of 74 per cent.

“Due to the challenging situation during the April-June quarter in 2021, when infections and casualties caused by the Coronavirus hit a peak before subsiding towards the end of May, both, demand and supply, were hit during the first two months, when most states put in place various restrictions and lockdowns to curb the spread of the virus. However, some ground on both the numbers was covered during the month of June, when states started to open up. The same is reflected in Q2 demand and supply numbers. We expect improvement on both these indicators of residential real estate health in the upcoming quarters, since India’s vaccination programme is likely to gather pace. It is also important to mention that despite the lockdowns and subdued sentiment, the government gave the sector a much-needed boost with the passing of the Model Tenancy Act, which is expected to give a fillip to rental housing supply in the country. The RBI is also doing its bit by continuing to maintain its accommodative stance, keeping the repo rate and reverse repo rate at a status quo of 4% and 3.35%, respectively, which in turn would allow the low mortgage interest rate regime for home buyers, to continue. All these measures, combined with latent demand, will certainly help our sector to bounce back faster than what was anticipated earlier,” said Dhruv Agarwala, group CEO, Housing.com, Makaan.com and PropTiger.com.

Prices seen rising in some cities over supply constraints

Average values of properties have also increased in some cities like Ahmedabad and Hyderabad, owing to supply constraints during the lockdowns.

Price growth: City-wise break-up

Source: Real Insight: Q2-2021

For similar reasons, average rates continued to move up, even if marginally, in all cities barring the MMR, where annual price growth remained flat. 

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New Supply Increases 49% In Jan-March Quarter Amid Improvement On Liquidity Front: PropTiger Report

April 9, 2021: Amid some ease in liquidity conditions because of the increased government support, new supply in India’s eight prime residential markets has shown a marked improvement in the January-March (Q1) period of 2021 (CY21), shows a report by property brokerage firm PropTiger.com.

According to the report, titled Real Insight – Q1CY21, builders in India’s eight prime residential markets launched 53,037 units during the three-month period, an annual appreciation of 49 per cent when compared to the same quarter last year, interestingly the last quarter before the coronavirus hit India, consequently battering its economy.

 “As the economy gradually marches towards recovery, as reflected in global rating agencies and think-tanks revising India’s growth forecasts for 2021 and 2022, the residential real estate market in the country is also seeing a positive momentum on the back of various measures taken by the centre and state governments, the RBI and the entire banking system (as demonstrated in home loan rate reductions). This positive change is visible in the first quarter through an increase in supply numbers, an indication that developers are more comfortable now with regard to liquidity support and buyer sentiment,” said Dhruv Agarwala, group CEO, Housing.com, Makaan.com and PropTiger.com.

On the quarter-on-quarter (QoQ) basis, new launches showed a marginal decline of two per cent.

Homes sales show 5% annual decline

Real estate developers in India’s eight prime residential markets sold a total of 66,176 apartments in the primary segment, a five per cent fall when compared to the sales numbers in the January-March period of 2020.

However, sales numbers for Q1 showed an increase of 12 per cent when compared to the preceding quarter, amid states offering incentives to homebuyers in the form of reduced stamp duty and circle rates. The report also attributed the quarterly increase in home sales to affordable lending rates by banks.

“The metrics on the demand side have also been largely stable, with the job market opening up again in various industries, giving people the confidence to take advantage of a property market that is at its most affordable for home buyers in years,” said Agarwala.

“The Maharashtra government’s decision to temporarily lower stamp duty on property registrations helped mitigate the steep decline in sales for the Mumbai and Pune markets that contribute the most to the national stock of unsold homes. The state government should have continued with the benefit of reduced rates to keep the sales momentum going. We also expect states like UP and Haryana to announce stamp duty and circle rate reductions in order to provide support to crucial housing markets of Noida and Gurugram in the national capital region,” said Mani Rangarajan, Group COO, Housing.com, Makaan.com and Proptiger.com.

Price growth remains stable

With Ahmedabad and Hyderabad being the only exceptions, no other city included in the analysis showed any marked upwards movement in average annual values of property in the primary segment. The pressure on price growth is expect to continue in the upcoming quarters amid a dramatic increase in coronavirus infections in India that has forced many states to impose partial lockdowns and night curfews.

Annual price growth: City-wise break-up

 Source: Real Insight: Q1 2021

Unsold stock declines 5%, but inventory overhang increases

As on March 31, 2021, the eight housing markets included in the analysis has 705,344 unsold units in the primary market, the report showed. This demonstrated a five per cent annual decline in the unsold stock. The MMR and Pune contributed the most to this unsold stock, with a combined share of 54 per cent.

An indication that demands needs to improve at a much faster level and the existing support measures might not be sufficient to deal with the unsold stock, the inventory overhang---the estimated time builder would take to sell off the existing stock keeping in view the current sales velocity--- has remained unchanged at 47 months as it was in the previous quarter.  

Unsold stock: City-wise break-up

 Source: Real Insight: Q1 2021

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Home Sales, New Launches Improve In Q4 2020: PropTiger Report

January 11, 2021: Housing sales and new launches have shown improvement in Q4 2020, primarily because of cost-related benefits offered to homebuyers during the three-month period, also known as the festive season, shows Real Insight: Residential Annual Roundup 2020, a report by property brokerage firm PropTiger.com.

Yearly round-up of India’s 8 residential markets in 2020

 Source: Real Insight: Residential Annual Roundup 2020

According to the report that analysed the performance of India’s eight prime residential markets during October-December 2020, new supply witnessed a 173% Q0Q (quarter-on-quarter) growth while sales showed a 68% increase over the July-September period of 2020.

“The quarterly spike in supply numbers could largely be attributed to the increased popularity of residential realty in the aftermath of the Coronavirus pandemic that has laid bare the insecurities of other asset classes. Various government-offered support measures to provide a cushion to the developer community, have also provided them with some scope to launch new schemes,” the report says.

"All factors considered, the sector has shown remarkable tenacity in 2020, against unprecedented odds that have caused the economy to contract and impacted consumer spending. The fact that housing sales in India's key markets have started to bounce back, in spite of the general gloom caused by the pandemic, shows the immense potential of the real estate sector, which employs the highest number of unskilled workers in the country. The sector's performance seems particularly impressive, given that the pandemic has impacted the income-generating capacity of a large number of people. End-users and investors continue to feel confident about investing in real estate. Prices continued to remain stable and the overall outlook looks positive,” said Dhruv Agarwala, group CEO, Housing.com, Makaan.com and PropTiger.com.

Break-up of sales and launches in eight cities in Q42020

Source: Real Insight: Residential Annual Roundup 2020

A city-wise break of launches depicts a quarterly increase across cities, barring Ahmedabad, in Q4 2020. The highest number of units were launched in Hyderabad, Pune and Mumbai, respectively.

"While the trends point to a market recovery and positive news, given the imminent launch of a vaccine that will ease the pandemic concerns, our optimism should be cautious. Buyers continue to expect low home loan rates, extension of developer offers and prefer ready-to-move-in inventory than those under construction. We believe that the government should continue to support the sector, through moves such as lowering stamp duty, re-evaluating circle rates and increasing the tax deduction limit for interest on home loans, to ensure that the sector continues to revive. The sector is digitising at a rapid pace and more than 90% of potential home buyers have moved online, to shortlist properties to buy. We have seen a strong growth in online booking throughout 2020,” added Mani Rangarajan, Group COO, Housing.com, Makaan.com and PropTiger.com.

Unsold stock: City-wise break-up

However, demand being far from the pre-COVID levels is evident from the fact that inventory overhang - the average estimated time builders in the eight markets will take to exhaust the unsold stock - has increased to 47 months in Q4 2020 as against 27 months in Q4 2019.

There has, however, been a 9% annual fall in unsold stock numbers - it stood at over 7.18 lakh units as on December 31, 2020 as compared to nearly 7.92 lakh units in Q4 2019.

At 55% combined, Mumbai and Pune hold the highest share in the unsold stock. At 72 months, the inventory overhang, however, is the highest in the NCR.  Hyderabad has the lowest inventory overhang of 29 months.

 Source: Real Insight: Residential Annual Roundup 2020

No downward correction reported in average prices

The annual data shows that there has not been any downward movement in the average prices of new units in India’s eight markets. Markets like Ahmedabad and Hyderabad have, in fact, seen modest price growth in the one-year period. In other cities, annual price growth remained range-bound.

To read the full report, click here.

Price growth: City-wise break-up

Source: Real Insight: Residential Annual Roundup 2020

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October 14, 2020:

Sales, Launches Increase In Q3 2020, Over Previous Quarter: PropTiger Report

After nose-diving during the April-June period, home sales and new supply numbers have shown an increase in the July-September period of the calendar year 2020, shows a report by property brokerage PropTiger.com.

According to Real Insight Q3 2020, a quarterly analysis of India’s eight prime residential markets that include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, the Mumbai Metropolitan Region (MMR), the National Capital Region (NCR) and Pune, a total of 35,132 homes were sold during the three-month period between July and September, as against 19,038 units in the preceding quarter. Similarly, new supply also increased to 19,865 units in the September quarter as against 12,564 homes in the previous quarter.

“Green shoots are visible, pointing to the start of a recovery in residential real-estate, evidenced by the improvement in new launches and sales on a quarter-over-quarter basis. These are unprecedented times, which have made buyers aware of the important role that homes play in ensuring their well-being, as well as their physical and emotional security. This, together with the fact that real estate is a hard asset and the fact that home loan rates are near a 15-year low, have encouraged buyers to return to the market. In recent times, the government and the Reserve Bank have also taken steps, to enhance liquidity in the sector and encourage banks to extend home loans at cheaper rates. With several macro-economic indicators showing a positive trend in September, we may well be on the road to a more sustained recovery and the upcoming festival season will be critical, in determining the growth trajectory in the sector over the next 12 months,” said Dhruv Agarwala, group CEO, Housing.com,  PropTiger.com and Makaan.com.

While indicating that buyer sentiment might have seen some improvement during the quarter, as the government started the phased unlocking of the country, to kick start the Coronavirus-hit economy, the numbers are way below those registered in the same period last year.

An annual comparison of supply and demand numbers show that housing sales fell 57% year-on-year while new launches depreciated 66% during the same period.

Key numbers for July-September period 2020

Inventory declines 12% year on year

As against 8,23,773 unsold homes on September 30, 2019, builders in the eight cities now have a lesser unsold stock burden. With a decline of 12%, this stock as on September 30, 2020, stood at 7,23,068 units. However, the weak demand means builders would now take much longer to shed this burden as the Coronavirus affects business. When compared to 28 months last year, the inventory overhang has now increased to 43 months.

Inventory overhang is the estimated time period within which developers will be able to sell off the current stock. This projection is made, keeping in view the current sales velocity.

Key markets and their inventory burden

Source: Real Insight Q3 2020

Price growth remains largely unchanged

Even though housing markets covered in the analysis showed varying trends, there was only a flat 1% reduction seen in the overall average house prices, when compared on a quarter-on-quarter basis. On an annual basis, housing prices have shown an increase of the same percentage point.

“Consumers continue to perceive real-estate as the most stable asset and a number of them are looking to upgrade their homes, as working from home is likely to continue. The government has also been supportive, by taking steps to make buying more attractive. While states such as Maharashtra have reduced stamp duty rates on property transactions, financial institutions have also brought home loan interest rates to the sub-7% level since the RBI brought the repo rate to 4%. On its part, the developer community is not only ensuring buyers are able to book their future homes using virtual tools but also offering festive discounts and easy payment plans. We are optimistic that sales during the festive season will be encouraging and will help drive further recovery in the sector,” says Mani Rangarajan, group COO, Housing.com, Makaan.com and PropTiger.com.

Price card

Weighted average property price in top 8 residential markets 

Source: Real Insight Q3 2020

To read the full report, click here.

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Sales, New Supply Drop In Q2 2020 Amid COVID-19 Concerns: PropTiger Report

July 29, 2020: The Coronavirus pandemic that has forced some major economies of the world into recession, has also severely impacted the housing market in India during the April-June quarter of 2020, numbers available with PropTiger.com show.

According to Real Insight: Q2 2020, a quarterly analysis of eight prime residential markets in India, only 19,038 units were sold across India’s eight key property markets during the three-month period. Similarly, only 12,564 units were launched during this period. In percentage terms, housing sales declined 79% annually while falling 73% QoQ. New supply dipped 81% annually while falling 65% QoQ.

 Click here to read the full report.

Launch and sales numbers

Source: Real Insight: Q2 2020

“The current pandemic is an unprecedented black swan event that is expected to contract growth in the global economy, including that of India. As anticipated, demand was adversely impacted due to the economic uncertainty, combined with growing unemployment. Our recent Housing.com-NAREDCO buyer survey indicated that buyers have pushed back their purchasing decision by up to a year. While developers are increasingly offering schemes, such as flexible payment plans, selective discounts and price protection plans, to attract buyers, they are understandably cautious and are focusing on completing existing projects. In fact, the delivery of existing projects may get pushed back, depending on how quickly supply-chain, labour availability and liquidity inflows are restored. We are unlikely to see new launches increase significantly for the next few quarters, as developers wait for demand revival and augment their cash flows through sales of existing units. Notwithstanding these lacklustre results, buyers continue to affirm their faith in real estate as an asset class, with over a third of our surveyed buyers choosing it as their preferred form of investment," says Mani Rangarajan, Group COO, Housing.com, Makaan.com and PropTiger.com.

Inventory overhang at 35 months

The demand slowdown has resulted in an increase in the inventory overhang, in spite of the fact that there has been a 13% reduction in unsold stock in the past one year. As on June 30, 2020, developers had an inventory consisting of 7,38,335 units across the eight markets. In Q2 2019, the unsold stock stood at 8,46,460 units. Inventory overhang has, however, increased to 35 months, as against 28 months in Q2 2019.

Inventory overhang is the time developers would take to sell off the unsold stock, at the current sales velocity. 

At nearly 56%, Mumbai and Pune markets together contributed the highest to the share of unsold stock, followed by NCR (15%) and Bengaluru (10%).

Source: Real Insight: Q2 2020

The NCR market has the highest inventory overhang of 53 months as of now, while Hyderabad has the lowest, at 19 months. The city also has the lowest inventory stock while Mumbai has the biggest burden.

The overhang situation

Data as on June 30, 2020

Source: Real Insight: Q2 2020

Price growth muted

Barring Hyderabad and Ahmedabad, where annual price growth was 7% and 6%, respectively, all the other housing markets recorded only negligible growth, as compared to the levels seen in Q2 2019. With consistent price growth, Hyderabad is now the second most-expensive property market among the eight cities.

Data as on June 30, 2020

Source: Real Insight: Q2 2020

Note: Cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, NCR, MMR and Pune.

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Housing Sales Fall 25% In Q2: PropTiger Report

October 18, 2019: Housing sales in India’s nine residential markets declined by 25 per cent in the July-September quarter of the current financial year, a latest report by PropTiger.com shows. This indicates that the various measures launched by the government and developer community to push demand, are yet to yield desired results. An ongoing liquidity crunch and a shift in work approach also led to a fall of 45 per cent in new project launches during the quarter when compared to the same quarter the previous year.

Titled Real Insights, the report covers nine Indian residential markets including Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Kolkata, Mumbai, Noida and Pune. Quarterly and half yearly comparisons also show a downward trend in sales as well as launches, says the report.

Q1FY20 vs Q2FY20 comparisons showed depreciation in both, sales and launches wherein, new launches fell by 32 per cent and home sales declined by 23 per cent. When compared to H1 in FY2019, sales fell by 11 per cent in H1 FY20. During the same period, new launches declined by 39 per cent.

“New launches continues to show a downward trend in the September quarter as the government is moving towards finding a solution to the ongoing NFBC issue, a problem that has dried up the key source of finance for Indian developers. As buyers postponed their purchase decisions owing to the upcoming festive season, sales number also fell during the quarter,” says Dhruv Agarwala, Group CEO, Elara Technologies.

“While new launch numbers might continue to fall in the coming quarters amid the liquidity crunch, home sales numbers are expected to improve in the subsequent quarter, factoring in the festive spirit. Record low-interest rates and intensified measures by the government to restore the growth momentum, would be handy for buyers having property purchase plans this festive season,” Agarwala adds.

Unsold stock in the property market, however, declined by 13 per cent annually, primarily because of a decline in fresh launches. Builders in the nine markets jointly have an unsold stock of over 7.79 lakh units and may be able to sell it off only in 28 months, considering the current sales velocity, the report shows.

The report also shows that property values have undergone only slight changes in most markets, except Hyderabad where rates have seen a 15 per cent increase in the past one year. Only Gurugram (four per cent) and Chennai (one per cent) markets have seen a downward movement in pricing during this period. Other markets saw prices appreciate by 2-4 per cent annually.

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New Launches Dip 47 per cent in Q1 FY20: PropTiger.com Report

As the liquidity crunch in the real estate sector is seen deepening amid a crisis in the banking sector, new project launches in India’s nine major cities fell by 47 per cent during Q1 (April-June) FY20. According to Real Insight, a quarterly report by PropTiger.com that analyses data for nine key property markets across the country, home sales during the quarter declined by 11 per cent as compared to the same period last year, even as housing inventory fell 12 per cent. Property prices, however, remained largely flat, with only Hyderabad seeing an impressive annual appreciation of 17 per cent.

Since developers have shifted their focus towards completing their pending projects, a total of 1,20,500 units were delivered during Q1 FY20, says the report, adding that another 5,00,000 new units will be delivered by March 2020.  

To download full report, click here

GAINERS AND LOSERS

Standing Tall

Gurugram has emerged as the top performer during the quarter after registering positive growth in home sales, as well as new launches. While new launches more than doubled in the city, home sales increased by 32 per cent. The millennium city was in fact the only market where new launches increased in the quarter ending June.

Another positive news for homebuyers came in the form of a price correction in this otherwise expensive market. Rates of properties in Gurugram, declined by three percentage points in the past one year, shows the report.

Meanwhile, Hyderabad stood on a solid footing during the quarter when compared to its other southern peers. While launches declined by more than half, home sales numbers improved by 10 per cent as compared to the corresponding quarter last year. India’s pharmaceutical capital also has the best inventory profile in the country - the inventory is comparatively new (ages less than three years) and the overhang the lowest - at the current sales velocity, it would take a little over a year to sell the existing stock.

Hyderabad also topped the charts when it came to price appreciation with 17 per cent increase in property rates in the last one year.

Sales and Launches

Kolkata and Pune also showed an increase in home sales in the June quarter year-on-year, by 10 and five per cent, respectively.

With a drop of 56 per cent, Noida registered the biggest fall in sales during the quarter, followed by Ahmedabad where sales fell 36 per cent.

The biggest decline in new launches was seen in Ahmedabad with a drop of 89 per cent and the Mumbai Metropolitan Region with a fall of 62 per cent.

Inventory Profile

Noida has the worst inventory stock in the country. Not only did the housing stock increase 2 per cent in the affordable segment in the past one year, something that no other city witnessed, the overhang here is 41 months as opposed to the national average of 30 months. At the current sales velocity, it would take nearly 3.5 years more to sell off the existing housing stock in Noida.

Ahmedabad, Pune and Kolkata are the ideal places for affordable property investments since over 70 per cent of the unsold inventory is within the Rs 50 lakhs budget. The largest options for ready-to-move-in units lie in Ahmedabad and Chennai.

Note: The cities included in the analysis are Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Noida (includes Greater Noida and Yamuna Expressway) and Pune.