New Delhi July 29, 2020: Amid projections of India's economy taking a severe beating on account of the coronavirus-induced health and financial crisis, new launches and housing sales declined significantly in the country's eight prime residential markets during the April-June period, a quarterly analysis by real estate brokerage firm PropTiger.com shows.
The report, however, indicates that the pandemic has spurred a big change as far as the closing of real estate transactions is concerned. More and more buyers switched to digital channels for their future purchases due to the lockdown amid real estate gaining prominence as a preferred asset class as huge volatility in other investment options, in the wake of the Covid-19 crisis.
The following cities were covered in the analysis: Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR (Noida, Greater Noida, Gurugram, Ghaziabad and Faridabad), the MMR (Mumbai, Navi Mumbai, Thane) and Pune.
According to the report titled Real Insight: Q2 2020, housing sales in the three months period, with most of these cities in either a partial or full lockdown phase, dipped 79% over the same period last year. As against 92,764 units in Q2 2019, only 19,038 units were sold during April-June this year. Affordable housing (units priced up to Rs 45 lakh) continued to dominate the real-estate sector.
New launches also decreased significantly during this period as developers remained cautious during a period when commercial activity across sectors slowed down. The decline in launches continues the trend that we have seen over the last six quarters starting Q1'19. Launches decreased 81% during the quarter ending June 30 to 12.564 units. The first half of this calendar year showed a similar declined with a 65% dip in new launches. Launches declined significantly across cities, especially in Mumbai, Pune, Kolkata and Chennai.
Mani Rangarajan, Group COO, Housing.com, Makaan.com & PropTiger.com said that 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 economic uncertainty combined with growing unemployment; in fact, our recent Housing-NAREDCO buyer survey indicated buyers have pushed back their purchasing decision upto a year. While, developers are increasingly offering schemes such as flexible payment plans, selective discounts and price protection plans to attract buyers, developers are understandably cautious and are focused on completing existing projects. In fact, 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 lackluster 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.
Rangarajan further added ghati n the positive side, we are seeing increasing digitization of real estate with significant growth in online demand and developers and buyers moving strongly along the adoption curve for products such as virtual tours, drone shoots, video calls, and online booking platforms. More than 90% of all real estate search and discovery has moved online. We may be seeing a significant shift in the real-estate sector where technology will play a significant role in the property renting and buying process and property registration may move online in some states. While physical site visits will remain important, buyers will use technology to discover new homes, experience virtual site visits with some buyers booking online. Given social distancing and the use of technology, buyers will likely make fewer site visits than before.
No comments:
Post a Comment