Residential real estate market beats pandemic blues, sales in top 7 housing markets grow 71% YoY
Residential real estate has seen a dramatic boost in India’s top seven real estate markets, despite the devastating second wave of Covid-19 that reversed consumer sentiment in all sectors and hit the economy.
Home sales rose 71% year over year, with 237,000 units sold in 2021, 90% of pre-Covid 2019 levels. The Mumbai Metropolitan Area (MMR) had the highest sales with 76,400 units, followed by the National Capital Region (NCR) with 40,050 units sold, data from Anarock Property Consultants showed.
Real estate developers assume that growth, new trends and dynamics in the real estate industry can be expected in 2022.
“The pandemic has accelerated some existing trends that are fueling greater growth and vitality in the suburbs, digitization in home purchases and the increasing demand for the hub-and-spoke model in commercial real estate,” said Niranjan Hiranandani, Managing Director of the Hiranandani Group.
He said the accelerated vaccination campaign, home loan interest rate cuts, buoyant capital market, cash injections, record FDI (Foreign Direct Investment) and market consolidation are the highlights of 2021, calling it the “year of resilience”.
In the top 7 cities, over 237,000 units were launched in the calendar year, which was the pre-Covid level of 2019. The number of project starts rose by 85% over the course of the year. “Despite the pandemic, 2021 was a fantastic year for the Indian housing sector. An equal number of houses were opened and sold, ”said Anuj Puri, Chairman of the Anarock Group.
The middle segment, priced between 40 lakh and ₹ 80 lakh, had the highest share of total launches at 39%, followed by the affordable segment under ₹ 40 lakh with a share of 26%. The premium segment – 80 lakh to 1.5 billion yen – accounted for 25% of the year’s launches.
Highest quarterly sales since 2015
“The fact that launches have returned to pre-Covid levels is very significant and property sales were only 10% behind 2019,” said Puri. “The last quarter was the best, with home sales in the top 7 cities hitting a new high of 90,860 units, the highest quarterly sales since 2015.”
A significant surge in home ownership has been helped by home builder discounts and offers, government incentives such as the Maharashtra stamp tax cut, and lenders maintaining decades of low interest rates.
Average residential property prices in the top 7 cities rose 3-5% year over year in 2021. Bengaluru and MMR saw the highest price increase of 5%, while Chennai and Kolkata saw a 3% increase.
More launches and total absorption in the top 7 cities than in 2020 resulted in minor changes in the available inventory. However, compared to 2019, the available inventory decreased by 2% at the end of 2021.
The data shows that the seven largest cities together will have a total unsold inventory of around 6.38 lakh units by the end of 2021. MMR and NCR saw annual decreases of 10% and 5%, respectively.