Buyers are back to purchasing homes in newly launched residential projects after staying away from this segment for long. Of the 2.37 lakh homes sold in 2021 across the top seven cities, over 34% were newly launched units.
While end-users continue to drive the housing market and ready or soon-to-be-completed homes are still in the highest demand, new launches are finding takers again, according to the latest ANAROCK Research data.
However, customers in the top two markets of MMR (Mumbai Metropolitan Region) and NCR (National Capital Region) are still wary of new launches. These two markets saw the lowest absorption share of newly launched units at 26% and 30%, respectively. Compared to 2019, this share has risen in both cities in 2021, but is still lower than in other cities.
Buyers in NCR and MMR are cautious and opt for either ready or nearing completion homes, despite the higher prices. As per ANAROCK Research, NCR and MMR together comprise a massive 76% share of 6.29 lakh delayed/ stalled units across the top seven cities. These units were launched either in 2014 or before.
In 2019, the sales share of newly launched homes was lower. Of around 2.61 lakh homes sold that year, newly launched homes accounted for close to 26%. In 2020, of the 1.38 lakh units sold in the top seven cities, 28% were launched during the year.
Hyderabad accounted for the highest absorption share of new units among the top seven cities. Of the 25,410 units sold in 2021 in the city, nearly 55% were launched in the same year.
Anuj Puri, chairman, ANAROCK Group, said, “End-users with a preference for ready-to-move-in or almost-complete homes continue to rule the roost. However, the demand scale is shifting gradually. Among other things, the increased sales share of newly launched homes heralds the revival of investor interest. This is significant — over the last three-four years, investors had more or less exited the residential real estate stage and were focusing on other asset classes.”
Puri said while the return of investors is positive from a sales point of view, an end-user driven market helps keep prices in check. “As evidenced in the past, increasing investor activity can lead to faster price hikes,” he said.