Housing sales in top 7 cities surge 29%, new launches by 51% in Q1 2021

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Updated: Mar 25, 2021 12:27 PM

Around 58,290 units were sold in Q1 2021 in comparison to 45,200 units in Q1 2020 - effectively breaching pre-COVID levels.

New launches in the top 7 cities yielded 62,130 units in Q1 2021, against 41,220 units in Q1 2020.

Spurred by stamp duty cuts, further reductions in home loan rates, and ongoing developer discounts, the housing sector in the top 7 cities of the country has staged an impressive comeback post COVID-19. ANAROCK’s Q1 2021 data shows that housing sales in the top 7 cities increased by 29% and new launches by 51% during this quarter against the corresponding period in 2020.

Around 58,290 units were sold in Q1 2021 – a yearly increase of 29% – in comparison to 45,200 units in Q1 2020 – effectively breaching pre-COVID levels. NCR, MMR, Bengaluru and Pune together accounted for 83% of the sales in the quarter. MMR and Pune together accounted for 53% of housing sales in the quarter – MMR sales increasing by 46% annually, and Pune by 47%. With about 8,670 units sold, Bengaluru was the only city in the top 7 to not record a major yearly change in total sales numbers in this quarter.

Hyderabad recorded the maximum rise in sales in this quarter among the top cities. City sales increased by 64% – from 2,680 units in Q1 2020 to about 4,400 units in Q1 2021.

New launches in the top 7 cities yielded 62,130 units in Q1 2021, against 41,220 units in Q1 2020. Again, Bengaluru was the only city to see a 11% yearly drop in new launches. MMR, Pune, and Hyderabad together contributed 66% of the total new supply in the quarter.

Despite spiralling new launches in this and the previous quarter, unsold inventory in the top 7 cities saw a nominal yearly decline – from 6.44 lakh units towards Q1 2020-end to close to 6.42 lakh units by Q1 2021-end. However, on a q-o-q basis, unsold stock rose by 1% due to a robust healthy new launch pipeline in most cities.

Commenting on the same, Anuj Puri, Chairman, ANAROCK Property Consultants, says, “Demand boosters such as stamp duty cuts, further reductions in home loan rates by most banks (to 6.70%) and ongoing developer discounts and offers helped the residential sector stage a convincing comeback in Q1 2021. Egged on by buoyant sales and enthusiastic consumer sentiment in the October-December period, developers launched several new projects in this quarter – with some spill-over from the pandemic-dampened 2020 pipeline.”

“MMR and Pune were the most active in this quarter since the limited-period stamp duty cuts and other sops and discounts substantially reduced acquisition cost,” says Puri. “MMR’s homebuyers have responded proactively to the bottomed-out property prices in the country’s most expensive real estate market. This is adequately vouchsafed by the significant rise in property registrations in Mumbai in the first two months of the year.”

Housing affordability will potentially remain extremely favourable throughout 2021. If the current sops and incentives continue, we will see sustained vibrancy in the upcoming quarters as well. End-users will drive maximum demand.

Mid-segment housing saw the maximum new launches in the quarter with a 43% overall share, with the affordable housing segment accounting for 30%. The supply of luxury housing (priced >INR 1.5 crore) also rose by 31% in Q1 2021 against the corresponding period in 2020.

Price Movements

Average property prices in the top 7 cities saw some movement in Q1 2021, with most cities recording a rise of 1-2% over Q1 2020 – except Kolkata, where prices remained stagnant. NCR and Bengaluru saw property prices rise by 2% during the year.

Unsold Inventory

Changes in the overall unsold stock in Q1 2021 over Q1 2020 were negligible, as new supply between Q4 2020 and Q1 2021 outpaced overall absorption numbers. MMR witnessed the highest yearly reduction in unsold inventory of 8%, while Bengaluru and Kolkata witnessed yearly reductions of 7% each. In contrast, unsold stock increased by 81% in Hyderabad in the same period, due to considerable new supply hitting this city in the last two quarters – Q1 2021 and Q4 2020.

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