Aggregate demand for housing witnesses over 13% growth in Q3: Report

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Updated: November 01, 2021 12:59 PM

With the Covid-19 infection rates dipping and the onset of the festive season, the demand for homes in the country is further slated to grow.

The pan-India prices witnessed a growth of 0.3% QoQ during this period, displaying high resilience of the housing markets compared to other real estate classes in the country.

The residential real estate industry is showing signs of recovery after experiencing serious economic repercussion caused by the pandemic. A pan-India quarterly increase in demand of over 13% was witnessed during the third quarter, reveals the latest Magicbricks PropIndex report for Q3 (Jul-August-September) 2021. Further, the aggregate supply in the country jumped by nearly 8% QoQ during the period.

With the Covid-19 infection rates dipping and the onset of the festive season, the demand for homes in the country is further slated to grow. The highlights of the quarter are Ahmedabad, Mumbai Metropolitan Region (MMR), Delhi NCR and Pune as they witnessed a remarkable surge in both demand as well as new supply in their respective markets. In each of these cities, peripheral locations continued to gain and garner attention.

The pan-India prices witnessed a growth of 0.3% QoQ during this period, displaying high resilience of the housing markets compared to other real estate classes in the country. It is expected that this trend will continue for a few more quarters, until unsold inventories decrease significantly, as most developers are expected to focus largely on launching affordable and mid-range homes.

QOQ CHANGE (%)

Commenting on the PropIndex report, Sudhir Pai- CEO of Magicbricks, said, “The market is further expected to grow in the festive season. There is more clarity in minds of consumers who were earlier waiting to buy properties even as they waited for the pandemic to ease. These factors have brought optimism amongst developers as they prepare to announce several new launches.”

“Peripheral regions remained epicenter of demand spurred by easing of restrictions, which helped to boost large scale economic activity and improve buyer confidence. This recovery can be attributed to factors such as reduction in guidance value, digitization of land records, housing schemes launched by the government and liquidity infusion through the SWAMIH fund,” he added.

Key takeaways from Propindex Report Q3:

Delhi: The real estate market of Delhi witnessed a 29.1% QoQ growth in demand. Moreover, the under-construction properties saw a significant increase in prices QoQ in almost all price segments. On the other hand, Ready-to-Move properties did not see any major QoQ change in prices during the last 5 years due to limited demand for the existing properties.

Bengaluru: Bengaluru’s residential real estate saw mixed results as demand increased by 6% QoQ and supply decreased by 4% QoQ in Q3 2021. Given the relaxations in mobility and increase in business operations, the city saw more buying interest as developers attract new home buyers by offering pre-EMI option and 12 months payment holiday. Additionally, the city saw more traction in the under-construction properties compared with Ready-to-Move properties during the quarter.

Chennai: The demand increased by 8% QoQ and supply by 2% QoQ in Chennai due to the easing of COVID-19 lockdown restrictions. Localities such as Medavakkam, Siruseri, Navalur, Pallavaram, and Perumbakkam saw an increase in their prices due to their proximity to employment hubs.

Hyderabad: Hyderabad’s residential real estate, which remained resilient during the COVID-19 pandemic, saw both demand and supply increase by 3% QoQ each in Q3 2021. There is a growing preference for peripheral areas, which can be attributed to the various initiatives of the state government to launch housing schemes and e-auctioning of plots for office spaces, in the outskirts of the city. Residential and commercial complexes are being launched at affordable prices in these locations. Moreover, the escalation in overall ticket sizes in central locations, due to increased cost of compliance, has also shifted buyer’s preference towards the peripheral localities.

Mumbai Metropolitan Region (MMR):  Mumbai’s residential market witnessed a spike of 5% QoQ in demand after witnessing a steep decline of about 16% in Q2 2021. Further, Navi Mumbai and Thane witnessed spikes of 19% and 10.5% QoQ in demand, respectively. The QoQ growth in demand was predominantly supported by the new supply in the market, which went up QoQ by 15% in Mumbai, 9% in Navi Mumbai and over 6% in Thane during the period.

The housing market in MMR is expected to pick up further due to the reduction in cases of COVID-19 and the ongoing festive season and prominent developers are preparing for new launches in the mid and affordable segments.

Pune: The residential market in Pune observed a significant increase in demand at 23.1% QoQ. The drop in COVID-19 cases and the ongoing festive season have influenced home buyers to look for properties, which helped boost the markets further. The supply within the city rose by 10% QoQ in Q3 2021, in comparison to its decline by 12% in Q2 2021. The quarter witnessed a shift in demand towards under-construction units and affordable housing.

Magicbricks Research forecasts a recovery in the markets driven by affordable housing and under-construction properties. Measures such as a reduction in guidance value, digitisation of land records, housing schemes launched by the government and liquidity infusion through the SWAMIH funds are some of the factors that will continue to support the revival of the housing markets.

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