Fri. Mar 29th, 2024

India’s housing sales in top eight cities, this year from January to June slumped to record the lowest in a decade due to the Pandemic. Those eight cities consist of Mumbai, Delhi-National Capital Region, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahme­dabad. Delhi-NCR, Chennai and Kolkata are the three cities that are worst hit due to new launches and sales falling down to near zero in the second quarter of the year. Home sales in cities like Bengaluru and Hyderabad witnessed 57% and 43% slump respectively, over the year-ago period.

Knight Frank India in its half-yearly report said, “Housing sales declined around 54% year-on-year to 59,538 units during the first half. New residential product launches, too, fell nearly 46% over a year ago to 60,489 units during the period”. The report said, “Housing sales tumbled 84% year-on-year to 9,632 units in the second quarter of the calendar year as the lockdown stalled all activities in the real estate industry.”

And added that housing sales in the first three months of the year were at 49,905. The number of new launches decreased by 90% over the year-ago period to 5,584 units in the second quarter. In the first three months, it was at 54,905 units.

Shishir Baijal, chairman and managing director of Knight Frank India said, “The residential real estate sector, which was already going through a rough patch, has got severely hit by the current crisis. With income uncertainty for future, demand for housing will take a hit. While the RBI has announced liquidity injecting measures and cut in policy interest rate, there is an urgent need for the government to come up with some demand boosting measures for the real estate sector.”

In his statement, he said that he expects that “the government will make positive interventions such as one-time restructuring of loans for developers as well as extension of moratorium for retail loans to ensure liquidity and low defaults”.

Sales of the home that priced under Rs 50-lakh ticket size have reduced by 3 per cent from 50% a year ago. The report said, “This can be attributed to income disruptions caused by the economic slowdown, and the pandemic imposed lockdown that has adversely impacted homebuyers in the affordable segment”.

And added, “Weighted average prices fell across most cities with NCR, Pune and Chennai witnessing the most correction at 5.8%, 5.4% and 5.5% year-on-year, respectively, during the first half of 2020”. Hyderabad and Bengaluru markets that are driven by the information technology sector witnessed price growth of 6.9% and 3.3% year-on-year, respectively, during the period.

“Unsold inventory across the top eight markets dropped by 1% to 446,787 units in the first half of the year. Mumbai had the highest quantum of unsold inventory at 150,154 units, followed by NCR at 118,064 units and Bengaluru at 77,043 units”. The age of unsold inventory has also increased across the eight major cities to 16.4 quarters from 15.4 quarters a year ago reflecting the sharp drop in sales even in the ready-to-occupy inventory”, the report said.

According to the report, “Office transactions declined 37% year-on-year, the steepest in a decade to 17.2 million sqft in the first half of the year. New completions were lower by 27% over the previous year at 17.3 million sqft”.

New completions were less by 27% over the previous year at 17.3 million sq ft. Yet, the weighted average rental for the eight cities increased 4% year-on-year to Rs 83 per sq ft/ month.

The report added, “The weighted average rental level was also kept buoyant by the fact that Bengaluru, which experienced the most rental growth at 5.6% year-on-year, also experienced the most transaction activity during the period. Rents dropped the sharpest in NCR and Ahmedabad at 8.8% and 12.1% year-on-year, respectively.”

Baijal commented, “With the economic uncertainties creating significant headwinds, we expect the office space take up to remain cautious. For the office market, it will be a wait and watch till a more permanent solution to this pandemic is found.”

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