Top 7 cities join house party as sales rebound

Residential real estate in the country’s top seven property markets has staged a comeback with sales exceeding pre-pandemic levels, driven by record-low interest rates, discounts offered by developers, lower prices and stamp duty cuts in key areas.

The improved sales momentum has lifted confidence among realty developers, pushing them to launch more projects as indicated by the rise in new offerings across markets.

Residential property sales have grown 29% to 58,290 apartments in the January-March quarter so far, led by a robust performance in the Mumbai Metropolitan Region (MMR), Pune and Hyderabad. New launches rose 51% to 62,130 apartments, showed Anarock Property Consultants data. MMR, Pune, and Hyderabad contributed 66% of the total new supply in the quarter. Rounding out the top seven are the National Capital Region, Bengaluru, Chennai and Kolkata.

“Demand boosters like stamp duty cuts, further reductions in home loan rates by most banks to 6.70% and ongoing developer discounts and offers helped the residential sector stage a convincing comeback in Q1, 2021,” said Anuj Puri, chairman, Anarock Property Consultants. “Egged on by buoyant sales and enthusiastic consumer sentiment in the October-December period, developers launched new projects in this quarter, with some spillover from the pandemic-dampened 2020 pipeline.”

Aided by stamp duty cuts, MMR and Pune together accounted for 53% of housing sales in the quarter. MMR sales rose 46% from the year earlier, and Pune sales by 47%. With around 8,670 units sold, Bengaluru was the only city not to record a major yearly change in total sales numbers in this quarter.

“Stamp duty cut has been a game changer in spurring real estate sales across all price segments in Maharashtra,” said Parag Munot, MD, Kalpataru, which has projects in MMR, Pune, Noida and Hyderabad. “Further, historic low interest rates, improved liquidity and macroeconomic optimism have all been vital in driving buying decisions. There is a strong recognition that this is the best time to invest in real estate.”

Registration of property transactions in Mumbai, the country’s biggest realty market, has continued to rise at a rapid pace, crossing 13,150 agreements so far in March, showed data from the office of the Inspector General of Registration, Maharashtra.

According to Puri, housing affordability will potentially remain favourable throughout 2021. If the current sops and incentives continue, sustained vibrancy can be expected in the upcoming quarters as well with end-users driving demand.

The key cities contributing to new unit launches in the first quarter were MMR, Hyderabad, Pune, and Bengaluru — together accounting for 79% of supply addition.

“Enquiries have been going up and we are witnessing robust conversion across our projects in various cities,” said Prestige Estates Projects CEO Venkat K Narayana. “Our Q3 was the best quarter ever for us with Rs 2,026 crore sales and Hyderabad led the performance with the new launch that has seen 60% bookings so far. The momentum continues to be good even in the March quarter.”

Mid-segment housing saw the maximum new launches in the quarter with a 43% overall share; the affordable housing segment accounted for 30%. The supply of luxury housing priced above Rs 1.5 crore rose by 31%.

The focus of real estate developers on mid-level and affordable housing projects continued in the first quarter with 69% of new launches in the sub-Rs 1 crore bracket, said a JLL India report.

Average property prices in most of these cities recorded an on-year rise of 1-2% except Kolkata, where they remained stagnant. NCR and Bengaluru saw property prices rise 2%.

Changes in the overall unsold stock were negligible as new supply outpaced overall absorption numbers. MMR witnessed the highest yearly reduction in unsold inventory of 8%, while Bengaluru and Kolkata witnessed yearly reductions of 7% each.