Bengaluru: Housing sales have increased by 12 per cent to 1,38,051 units during January-September period of the current calendar year from 1,23,725 units in the corresponding period of 2020 as per the recent report 'Real Insight residential Q3 2021 by housing brokerage firm PropTiger.com.
According to the report, driven by pent up demand and festive sales as well as gradual recovery in the Indian economy, improved job market and low interest rates, housing sales are likely to rise by 15-20 per cent above 2020 level during the current calendar year despite the strong second wave of the Covid pandemic.
Property sales picked up from July onwards as the infection rates waned, said Rajan Sood, Business Head, PropTiger.com.
However, Sood added, "despite the revival in the residential real estate market, housing sales might still fall short of 2019 numbers. A lot depends on sales numbers in the ongoing quarter."
As per market estimates, housing sales could rise by a high double-digit percentage during the October-December period of this year from 58,914 units in the same quarter last year.
In the 2020 calendar year, sales plunged 47 per cent to 1,82,639 units from 3,47,586 units in the previous year, mainly because of strict nationwide lockdowns to control the deadly coronavirus during April-June last year. "The likely growth in housing sales augurs well for the Indian real estate market and the overall Indian economy. The contribution of real estate in employment generation as well as the country's GDP is immense. So, the recovery in the housing market is the need of the hour," added Rajan Sood. "We are seeing heightened property search activity on Housing.com which points towards a positive turnaround for the residential real estate market for 2021. Reflecting the optimism in the sector, Housing.com's IRIS index, which is a leading indicator to assess the upcoming residential demand in the country, closed at an all-time high in September of this year", said Ankita Sood, Director and Head of Research, PropTiger.com, Housing.com & Makaan.com.
In case of Bengaluru, the online high-intent homebuyer activity in the city is already 90 per cent closer to the historical peak of March 2021. Most of these property searches are concentrated in prominent commercial and residential locales such as Krishnarajapura, Whitefield, Varthur and Electronic City. The build-up of search queries suggests improving consumer sentiment in this end-user driven residential market, signaling a positive outlook for the year.
The demand drivers over the last one year have been -- low interest rates on home loans, stable housing prices in the last few years, discounts & special offers from builders to speed up liquidation of their stocks and stamp duty reduction by various state governments including Karnataka wherein the state has reduced the stamp duty on property priced between Rs 35 lakh and Rs 45 lakh to 3 per cent from the earlier 5 per cent. The adoption of work from home policy has also led to rise in housing demand. The belief in home ownership has gained momentum, even among young millennials who earlier were reluctant to buy homes, preferring the flexibility offered by shared living.
After the outbreak of the pandemic, the consolidation of housing demand towards big, listed and reputed developers has gained momentum. This is getting reflected in their quarterly sales bookings numbers. Nevertheless, India's residential market would still take some time to reach pre-Covid levels of around 3.5 lakh units of annual sales. "As per our estimates, housing prices will remain stable although there is upward pressure because of rising input costs. Some branded developers have raised prices, albeit marginally, to offset increase in input costs. Consumers are also ready to pay a premium to those builders who have an impeccable execution track record", added Rajan Sood.
"Our research shows that demand for plots has improved across all major cities. Independent floors too are in demand in some cities like Delhi-NCR. The demand is largely driven by end-users in affordable and mid-income segments, but luxury properties are also not lagging behind."
New launches have more than doubled to 1,40,087 units during January-September 2021 from 68,097 units in the year-ago period. Fresh supply has already crossed the annual figures for 2020 that saw total new launches at 1,22,426 units across eight cities. "New supply in the full 2021 calendar year is expected to reach near the pre-Covid level", Added Sood.
During 2019, total launches were 2,44,254 units.