Housing demand expected to remain static in April-June quarter amid second wave: Report
New supply of housing units declined 40% year-on-year during January-March 2021 across seven major cities, according to data analytics firm PropEquity
The demand for domestic residential real estate is expected to be sluggish for the April-June quarter amid the second wave of the Covid-19 pandemic, according to data analytics firm PropEquity. The residential real estate sector has seen consistent growth on the back of supportive government policies and multiple incentives, resulting in a 21% hike in housing sales from January to March 2021. However, the new supply declined 40% year-on-year during January-March 2021 across seven major cities, according to PropEquity.
Housing sales units rose by 21% across seven cities in the first quarter of the calendar year 2021 to 1,05,183 units against 87,236 units in the year-ago period. Bengaluru, Chennai, Hyderabad, Mumbai Metropolitan Region (MMR), Delhi-NCR, and Pune saw the rise in housing sales.
Samir Jasuja, founder and MD at PropEquity, said “the first quarter of this calendar year was relatively better for Indian realty as compared to the last year. There was higher demand in ready-to-move-in units and the projects nearing completion. However, the second wave of COVID will lead to muted demand going forward.”
According to the data, housing sales in the Delhi-NCR rose 6% to 6,644 units against 6,239 units. While in Bengaluru, it rose 13% to 12,262 units in January-March 2021 from 10,878 units in the year-ago period. Chennai saw a 29% rise in sales at 5,055 units from 3,930 units, while Hyderabad witnessed a 16 % rise in demand to 10,964 units from 9,477 units.
In Maharashtra, housing sales in MMR grew 26% to 41,323 units from 32,886 units, while Pune registered 31% growth in demand at 25,252 units compared to 19,221 units.
Demand and Supply disruption
Amid the second wave, many under-construciton sites are still not functioning at full capacity and this has impacted the fresh supply or new launches. Among the top four metro cities, Kolkata saw a fall in housing sales with 20% to 3,682 units in January-March 2021 from 4,605 units a year ago. However, Samir Jasuja expects sales to pick up at the end of the second wave.
Future outlook
Last month, housing brokerage firm PropTiger reported a marginal 5% year-on-year decline in housing sales during January-March 2021 across eight big cities.
Property consultant Anarock said sales grew 29% during January-March this year across major cities but the next few months would be difficult.
The current Covid wave has hit the sector when Indian real estate housing demand was on the growth trajectory in Q1 of 2021,” said Ankush Kaul, President (Sales & Marketing) Ambience Group. He believes that once the current Covid spread in India stabilizes, the demand will again grow.