Nearly half of the total housing demand in the primary residential market across eight major cities is for two-bedroom apartments costing up to Rs 45 lakhs, reveals a report by digital real estate brokerage firm, PropTiger.com.
In its latest Real Insight report for the January-March 2021 quarter, PropTiger research revealed that housing sales across eight major cities declined only by 5% year-on-year at 66,176 units, indicating that demand is inching back to pre-COVID levels.
Residential real estate demand in January-March 2021
When compared with Q1 2020, Mumbai, Pune and Bengaluru witnessed a drop in sales, while Delhi-NCR, Kolkata, Chennai, Hyderabad and Ahmedabad saw growth in demand.
While analysing the sales numbers of these eight cities, it was found out that around 45% of sales in the January-March 2021 were contributed by the affordable housing segment – apartments priced below Rs 45 lakhs.
Around 26% of the sales were in the Rs 45-75 lakhs price bracket, 10% in the Rs 75 lakhs to Rs 1 crore bracket and 19% of sales were units above the ticket size of Rs 1 crore.
As much as 44% of the total demand was for units with 2 BHK configuration.
In line with expectations, the share of ready-to-move-in flats in total sales increased, compared to the preceding quarter.
“The affordable housing segment has been a top performer since the last few years. The government is providing tax incentives and interest subsidy to boost demand in this segment and achieve its target of Housing for All,” said Mani Rangarajan, group COO, Housing.com, Makaan.com and PropTiger.com.
On the overall market scenario since the outbreak of the COVID-19 pandemic in 2020, he said: “After a huge setback during the April-June quarter of 2020, India’s residential property market has been recovering month-on-month, on pent up demand, festival sales and rising importance of home ownership.”
Housing sales in January-March 2021 almost reached pre-COVID levels, driven mainly by the low interest on home loans and stamp duty cut by the Maharashtra government, he said.
However, Rangarajan feels that the recent outbreak of the second wave of COVID-19 and the semi-lockdown in many states, may put a brake on the revival of housing demand seen during the last nine months. “Although it is too early to assess the impact, we need to keep in mind that the real estate industry is more prepared this time, to handle the situation. The sector has taken a giant leap in the adoption of digital tools for marketing and sales, during the last one year,” he observed.
Residential real estate supply in January-March 2021
On the supply side, PropTiger research showed that new supply rose by 49% year-on-year, to 53,037 units across these eight cities, during the first quarter of this calendar year.
In line with demand trends, new supply continues to be concentrated in the sub-Rs 45 lakhs category, with a 45% share of the overall pie.
The mid-segment (Rs 45–75 lakhs price bracket) recorded a share of 27% of the total supply in the first quarter.
The above Rs 75 lakhs price bracket accounted for 28% of the total supply.
“Weighted average prices for new launched projects in a majority of India’s top cities remained muted in the past few quarters, with prices appreciating marginally in the range of 1%-3% annually,” the report said. Hyderabad and Ahmedabad witnessed 5% growth in January-March 2021, as compared with the year-ago period.