High demand for housing: Check factors behind the rise

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Following the second wave of Covid-19, housing sales have increased on the back of low home loan rates and robust hiring in the IT/ITeS sector. In Q2 2021, housing sales surged 113% across the top-7 cities from 29,520 units in Q3 2020 to nearly 62,800 units in Q3 2021. MMR accounted for 33% of the total sales, followed by NCR with a 16% share, according to a report by Anarock. Meanwhile, new launches in the top 7 cities rose by 98% yearly from 32,530 units in Q3 2020 to 64,560 units in Q3 2021. While MMR continued to see the highest number of new launches (of 16,510 units) in the quarter, Hyderabad was close behind with a new supply infusion of approx. 14,690 units.

“IT/ITeS continues to drive the bulk of housing demand in the top 7 cities,” said Anuj Puri, Chairman – Anarock Group. “In Q3 2021, significantly improved job security and robust hiring in the IT/ITeS and financial sectors piggybacked on record-low home loan rates and growing homeownership sentiment. The ongoing WFH culture continues to influence residential sentiment on two major fronts – overall housing demand and unit sizes. The fast-paced vaccination drive is an added sentiment booster, especially in terms of increased site visits.”

New launches

“With new launches increasing by 98% and housing sales skyrocketing by 113%, Q3 2021 stands in stark contrast to this period last year. MMR and NCR together accounted for nearly 50% of the overall housing sales in the quarter,” said Puri.

Average property prices also saw a 3% yearly increase across the top 7 cities – to Rs 5,760 per sq. ft. in Q3 2021 from Rs 5,600 per sq. ft. in Q3 2020. Bengaluru leads with an approx. 4% annual rise – from Rs 4,975 per sq. ft. in Q3 2020 to approx. Rs 5,150 per sq. ft. in Q3 2021.

Affordable housing

“With the robust recovery of the real estate and construction segment, job market revival, and the sizeable vaccination, sales of both residential and commercial properties are showing strong signs of revival. The share of home sales in the under Rs5 million ticket size category standing at 43% in Q3 2021 reflects the high demand for affordable housing in and around metros. The upcoming festive season will boost this trend as the end-consumers and investors alike will look towards making the purchase, ultimately reflecting further growth,” said Rohit Poddar, Managing Director, Poddar Housing and Development Ltd.

“Looking at the commercial segment, the sector is starting to boom as things start easing out and the same is evidently visible. The 6% growth of the commercial real estate segment signifies the strengthening of businesses despite the second wave. As restrictions ease-out further, the demand for commercial property is surely expected to overpower pre-pandemic levels.”