The residential market has witnessed a steady rise in terms of both sale of home units and new launches, says a Knight Frank India report for the first quarter of 2021 (January-March). While launches recorded a little over 76,000 units in top eight cities across the country, 71,963 home units were sold. Mumbai and Pune recorded the maximum sales and launches as the two markets benefited from low interest rates as well as reduction in stamp duty charges by the Maharashtra government that added velocity to the sales. Karnataka too announced stamp duty sops to buyers for residences costing up to ₹45 lakh. However, it came towards the end of Q1-2021 and the impact may be seen in the next quarter. Bengaluru followed Mumbai and Pune, recording the sale of 10,219 home units while reporting 7,467 launches.
Basing its optimism on the recovery during the last two quarters i.e., Q4-2020 and Q1-2021, the report points out quarterly sales volumes have steadily improved since Q2-2020 and have surpassed the 2019 pre-Covid quarterly sales average. The sale recorded during Q1-2021 (71,963 units) is 44% more than in Q1-2020. Even the launches (76,006) showed 38% YoY growth, a substantial leap over the same quarter last year.
The report points out that increasing volume of sales has arrested the intensity of fall in residential prices while Hyderabad and National Capital Region (NCR) saw a marginal growth in prices compared to a year ago. Consequent to spurring of sales, the discounts and freebies by the developers have declined significantly in the just concluded quarter. Unsold inventory also came down to 0.44 million units in Q4-2020, two per cent less than a year ago. “Homebuyers were inclined to acquire ready or near-ready inventory to minimise completion risk. This is reflected in the average age of inventory which stayed at 15.7 quarters in Q1-2021 compared to 15.9 quarters a year ago”, said the report.
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Commenting on the encouraging rise in sales and launches, Shishir Baijal, CMD, Knight Frank India, stressed the need to temper the optimism with caution, saying the future still remains uncertain in the wake of the second wave of COVID-19. “Moreover, Maharashtra, the State with the largest amount of sales and launches, has announced lockdown during April and reverted the stamp duty charges to the previous level, hence the need to tread carefully to maintain the recently acquired momentum”, he added.