The real estate sector in Delhi NCR was severely impacted by the pandemic as property enquiries, sales, new launches, and the ongoing construction work came to a sudden halt and failed to pick up amid growing COVID-19 cases in India.
Residential property sales and new project launches took a massive beating in Delhi NCR in the April-June 2020 quarter. The city saw no new unit additions during the period and property enquiries dropped by a huge margin. Enquiries picked up pace in June, but remained 50-60% lower than the pre-COVID levels. Total transactions during the studied quarter numbered at around 2,000 units, about 75% lower than the previous quarter and around 85% lower than the last year, according to a report by 99acres.com.
Property registrations, too, went down by a notable 93% in Ghaziabad and 85-86% in other zones. Across the five NCR towns, a total of 42,228 properties were registered in May and June, against 140,800 last year. Maximum registrations were noted for independent houses and plots, indicating lower offtake of high-rise apartments. Property prices maintained status quo across zones, except Delhi where average ‘asks’ dipped by a marginal 1%, QoQ. There were case-by-case negotiations of up to 10-15% in the resale segment. However, average property prices in Delhi NCR remained stable. Lucrative 10:90 schemes from Grade A developers remained popular amongst fence-sitters.
Beating all metro cities in India, Noida and Greater Noida emerged as the only areas to have reported an annual uptick in property sales in April-June 2020, albeit by a marginal 5%. Transactions numbered at around 1,175 units, as against 1,125 units in the same quarter last year. The month of April reported a significant downfall in enquiries and sales; however, a widened negotiation window of 10-15% attracted genuine homebuyers to close deals in May and June. A large portion of these transactions was a spillover from February and March, which could not be materialised post the outbreak of the novel Coronavirus in India.
Housing demand remained low-key and risk-averse homebuyers were particularly wary of under-construction projects in both Noida-Greater Noida and Ghaziabad. Over 250 residential and commercial real estate projects in Noida and Greater Noida alone were impacted by the nationwide lockdown.
The real estate story in Delhi was no different from the other zones. Property sales, enquiries and new project launches remained standstill in the month of April. After the gradual relaxation in lockdown, enquiries improved in May and June by 35-40% from the January-March 2020 levels; however, sale conversions continued to remain muted, across the zones. Property registrations, too, presented a grim picture with Delhi reporting zero registrations in the month of April, about 6,400 in May and around 14,000 in June. The numbers are down from about 29,400 registrations in May 2019 and 24,700 in June 2019.
Gurgaon and Faridabad reported muted property enquires and sales at the beginning of the April-June 2020 quarter; however, as lockdown restrictions eased, enquiries reported a gradual improvement. Amid the absence of site visits and the anticipation of a price correction, deal conversions remained as low as 5-7% of the Jan-Mar 2020 volume. Towards June-end, property enquires posted a 50% hike, especially in the price bracket of Rs 1-1.5 crore in Gurgaon and Rs 60-80 lakh in Faridabad.
According to the report, the 71-day lockdown came heavily on the development work of 4.25 lakh housing units in the city. By mid-May onwards, work at a few construction sites began at one-third capacity, instilling some hope of pick-up in the ensuing quarters. With key infrastructure projects including the Delhi Metro flagging off construction work, the realty sector awaits the festive quarter for a revival in property sales. Any possible reduction in property prices will only be realised in the next 6-9 months.
Thus, the real estate sector in Delhi NCR was severely impacted by the pandemic as property enquiries, sales, new launches, and the ongoing construction work came to a sudden halt and failed to pick up amid growing COVID-19 cases in India. However, a gradual recovery in transactions reflects at the latent housing demand in the city. Quality leads in the market are expected to reduce the home buying cycle in the months to come. While a price correction is most unlikely, the negotiation window might remain widened for another quarter. The premium market might suffer a dent in prices if sales do not resume in the upcoming quarter.