New home sales recover by 50% in Oct-Dec 2020

The quarter witnessed the launch of about 400 new residential projects in top eight metro cities, including the addition of phases in existing projects.

New home sales recover by 50% in Oct-Dec 2020
The Q4 2020 was testimony to the gradual recovery that the Indian residential real estate market is undergoing.

With the improving home buying sentiment, backed by a widened negotiation window and competitive home loan interest rates, home sales improved by 50 percent in October-December 2020 vis-à-vis July-September 2020, reveals the latest 99acres Insite Report, which focuses on capital and rental price trends in the residential realty market across eight major cities of India.

According to the report, the resale segment continued reporting a few distressed deals. However, prices in the primary market remain unchanged. Demand from NRI buyers went up significantly. The rental landscape, however, remained grim as students and working professionals continued operating from their hometowns amid the COVID scare.

Commenting on the same, Maneesh Upadhyaya, Chief Business Officer,, said, “Amid the turbulence created by the COVID-19 pandemic, the RBI and GOI announced several measures to aid economic revival. Bringing down home loan interest rates to almost a 15-year-low, stamp duty reductions in Maharashtra and Karnataka, liquidity infusion measures, one-time restructuring of loans and supportive stance for NBFCs, MSMEs, and real estate sector comforted businesses and individuals. With gradual unlocking of cities and news around possible vaccinations, normalcy started returning to the market. This all cumulatively helped push housing demand up and the last quarter of the year recorded a marked improvement in sales against the previous ones.”

Notably, Delhi NCR, Mumbai, Pune, Bangalore and Chennai reported a 10-45% rise in property sales in Oct-Dec 2020 against Jul-Sep 2020. Improved seller confidence in the market was also evident from a 15 percent rise in owner sale listings posted on 99acres in the same period.

“With the infection rate reducing and vaccination drives starting across the country, the worst seems to be behind us and the subsequent revival in businesses, and individual home ownership appetite are likely to aid realty growth in 2021,” added Upadhyaya.

Confronting the adversities posed by the world health crisis during April-June 2020, the onset of the final quarter of 2020 seemed promising. A perceptional and behavioral shift, coupled with the renewed housing demand, spiraled into rigorous absorption of housing units in October-December 2020. The festive vigour helped developers see improvement in new home sales, which numbered around 21,800 units, up by almost 50 percent, QoQ.

Mumbai remained the largest contributor (23 percent) to the overall home sales in Oct-Dec 2020, followed by Delhi NCR (20 percent). Pune, however, saw the maximum rise of over 45 percent in property sales, QoQ, as it almost reached its pre-COVID sales figures with the absorption of about 9,600 housing units. Demand from the non-resident Indians (NRIs) went up significantly by over 200 percent since March 2020. Across the consumer segments, ready units remained the prime choice as growing liquidity constraints kept buyers wary and cautious of under-construction projects.

Note: Graphs depict city-wise demand and supply of residential properties in various budget brackets in the studied quarter
* Property prices represent quarterly change * Rental ‘asks’ represent yearly change
* Supply is basis properties listed on * Demand is basis queries received on

Sales of ready-to-move residential projects spiked during Q4 2020 due to an improved sentiment towards owning a home. Demand for under-construction projects remained grim, barring those offered by financially stable real estate developers. The Centre’s assistance with stress funds for stuck realty projects may pave the way for those nearing completion in the ensuing quarters.

Despite an unrelenting focus on completing ongoing housing projects, a few Grade A developers launched new projects, sealing the sentiment of market revival. The quarter witnessed the launch of about 400 new residential projects in top eight metro cities, including the addition of phases in existing projects. In line with the previous quarter, Mumbai led all cities with a 27 percent share in new and re-launched projects. Pune and Hyderabad followed with a 22 percent and 19 percent share, respectively. Interestingly, Delhi NCR contributed the least with two percent share in the overall new unit additions; however, it reported a 13 percent jump in new launches, QoQ. Chennai, too, reported a three-digit growth in the number of new project launches reported in Oct-Dec 2020 vis-à-vis Jul-Sep 2020.

The affordable and mid-income price segment remained the most popular across cities. Several developers were seen realigning their projects and pricing as per consumer demand. The government, too, increased its focus on the affordable housing sector by introducing incentives for the rental complexes scheme and approving housing projects under the SWAMIH Fund.

The rental landscape continued grim as professionals and students continued operating from their hometowns amid rising COVID cases. The new-found strain of the virus may prolong the reopening of the market for another quarter; dampening the rental scenario further across cities. However, the capital market is expected to continue growing on the back of end-user demand.

The Q4 2020, thus, was testimony to the gradual recovery that the Indian residential real estate market is undergoing. The new-found penchant for home ownership, ultra-low home loan interest rates, the increased scope of price negotiation and the availability of the right products in the market worked in favour of end-users. With NRI demand on an all-time high, the year 2021 looks optimistic.

The estimated $500 billion expenditure towards infrastructure development and the Government’s efforts towards boosting affordable housing may turn corners for the sector in the New Year. The upcoming Budget 2020-21 may also instill positivity around realty investments in the next six months. The prime demand for the realty sector, i.e. of an Industry Status, if met, would expedite the recovery process and bring the sector back to its pre-COVID performance figures in the short term.

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First published on: 25-01-2021 at 12:53 IST