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

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

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

City

Launches YTD

Sales YTD

Unsold Inventory as on Dec 31, 2020

Inventory overhang as on Dec 31, 2020 (in months) 

Ahmedabad

7,687

12,156

38,614

38

Bengaluru

17,793

23,458

71,198

36

NCR

12,094

17,789

1,06,689

72

Chennai

12,382

10,452

36,609

42

Hyderabad

22,940

16,400

39,308

29

Kolkata

3,288

9,061

30,210

40

Mumbai

20,899

54,237

2,63,987

58

Pune

25,343

39,086

1,31,868

40

Total

1,22,426

1,82,639

7,18,483

47

 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

City

Launches

Sales

Ahmedabad

3,003

3,125

Bengaluru

6,104

7,660

NCR

5,120

6,065

Chennai

4,887

3,180

Hyderabad

12,723

6,487

Kolkata

1,658

2,518

MMR

10,070

18,331

Pune

10,764

11,548

Total

54,329

58,914

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.

  

City

Unsold stock on Dec 31, 2020 (units)

Inventory overhang (in months)

Ahmedabad

38,069

38

Bengaluru

71,133

36

Chennai

35,583

42

Hyderabad

39,234

29

Kolkata

30,060

40

MMR

2,67,398

58

NCR

1,06,560

72

Pune

1,29,199

40

National average

7,18,483

47

 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

City

Average price as on December 31, 2020 (in Rs per sq ft)

Annual growth in %

Ahmedabad

3,213

7

Bengaluru

5,342

2

Chennai

5,228

2

Hyderabad

5,602

5

Kolkata

4,202

2

MMR

9,448

No change

NCR

4,268

No change

Pune

5,077

4

National average

6,042

No change

Source: Real Insight: Residential Annual Roundup 2020

 

 

***

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

Sales

Up 85% qoq

Down 57% yoy

Launches

Up 58% qoq

Down 66% yoy

 

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

City

Inventory as on Sep 30, 2020 (units)

Inventory overhang (months)

Ahmedabad

38,736

31

Bangalore

72,754

36

Chennai

34,902

39

Hyderabad

33,072

25

Kolkata

31,070

39

MMR

2,72,248

52

NCR

1,07,634

58

Pune

1,32,652

37

National

7,23,068

43

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 

City

Average price as on September 2020 (in Rs per sq ft)

Percentage change over September 2019

Ahmedabad

3,151

6%

Bangalore

5,310

2%

Chennai

5,240

2%

NCR

4,232

-1%

Hyderabad

5,593

6%

Kolkata

4,158

1%

MMR

9,465

1%

Pune

4,970

2%

Source: Real Insight Q3 2020

To read the full report, click here.

 

 

***

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

 

Launches (units)

Sales (units)

Q1 2018

79,943

84,775

Q2 2018

78,574

85,053

Q3 2018

64,569

88,935

Q4 2018

73,621

91,965

Q1 2019

71,270

92,683

Q2 2019

65,238

92,764

Q3 2019

59,216

81,886

Q4 2019

48,530

80,253

Q1 2020

35,668

69,555

Q2 2020

12,564

19,038

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%).

 

City

Unsold units as on June 30, 2020

Ahmedabad

3,8933

Bengaluru

75,493

Chennai

36,272

Hyderabad

32,068

Kolkata

32,832

MMR

2,76,492

NCR

1,11,121

Pune

1,35,124

Total

7,38,335

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

City

Inventory overhang (in months)

Ahmedabad

26

Bengaluru

32

Chennai

36

Hyderabad

19

Kolkata

38

MMR

40

NCR

53

Pune

30

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.

 

City

Weighted average price (per sq ft)

Annual growth in Q2 2020

Ahmedabad

Rs 3,104

6%

Bengaluru

Rs 5,299

3%

Chennai

Rs 5,138

Flat

Hyderabad

Rs 5,505

7%

Kolkata

Rs 4,178

3%

MMR

Rs 9,490

1%

NCR

Rs 4,293

1%

Pune

Rs 4,951

2%

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.

 

 

***

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.

***

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.

Last Updated: Mon Jan 11 2021

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