04 October 2021
Most new launches in larger markets of Bengaluru, Mumbai and Delhi NCR were in affordable and mid segment
Lower COVID-19 cases and cautious unlocking of the economy due to the ongoing vaccinations has paved the way for higher residential sales in India in Q3FY21.
Residential sales increased 47 percent in seven top cities during January-September 2021 as compared to the same period last year, according to JLL's Residential Market Update – Q3 2021, released on October 4.
In numbers, 77,576 units were sold in Q3FY21 compared to 52,619 units in the year-ago period. "This implies that the second wave had limited impact on sales in the first three quarters of 2021," JLL said.
The report added that sales were also boosted due to many factors such as "lower COVID-19 cases in Q3 backed by robust vaccination drive which led to cautious unlocking of the economy in various states."
Among cities, Mumbai has consistently been the largest contributor to sales over the past five quarters. In Q3FY21, Mumbai and Delhi each accounted for 21 percent of the total sales, followed Pune and Bengaluru. Recovery is well underway as sales surpassed pre-COVID levels, the report added.
It further said that the top seven cities under consideration witnesses new launches of 32,863 units in Q3FY21, an increase of 21 percent quarter-on-quarter (QoQ). As the economy began to improve and with the festive season around the corner, developers continued to launch residential projects across the country.
The sveen cities under consideration were Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune. Mumbai here included Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai.
Most of the new launches in the Bengaluru, Mumbai and Pune markets were in affordable and mid segments. Hyderabad continued to dominate new launches and accounted for 29 percent during Q3FY21, followed by Pune and Mumbai, which contributed 23 percent and 19 percent, respectively, to the overall new launches.
The markets of Kolkata, Delhi-NCR and Pune witnessed a substantial increase in launch activities during Q3FY21, when compared to the same period last year as well as from the previous quarter, the report said.
Development focus on mid and affordable segments continued in Q3FY21 with 77 percent of the new launches in the sub-Rs 10 million category.
Developers continue to be cautious towards launches
Although Q3 2021 witnessed healthy launches, new launches continued to remain below par when compared to pre-COVID Q1FY20 around 40,500 units) and the average quarterly launches witnessed in 2019 (around 34,000 units).
Developers remain cautious in launching new projects as they are focused on off-loading their unsold inventory and recovering sales volume of the past few quarters, the report said.
Developers are largely aligning their launch strategies in sync with actual market demand, thereby keeping the market fundamentals robust.
The first three quarters of 2021 witnessed launch of 93,873 units registering a significant increase of 38 percent compared to the same period last year. Improving markets sentiments on the back of improved economic activities and the upcoming festive seasons have instilled confidence amongst developers as they strategically launch projects across cities to tap the growing demand.
Hyderabad, Delhi-NCR and Pune witnessed maximum growth in launches during the nine-month period ended September when compared to other cities, it said.
Unsold inventory in Q3FY21 remained almost stable when compared to Q2FY21 as demand and supply dynamics remained steady. An assessment of years to sell (YTS) reveals that the expected time to liquidate this stock has increased marginally from 5.2 years in Q2FY21 to 5.3 years in Q3FY21.
Prices are expected to remain range-bound. Residential prices in a majority of India’s residential markets have remained stagnant in the past few years. In Q3 2021, prices remained largely stagnant when compared to the previous quarter, across all the seven markets under review.
With the festive seasons around the corner, developers are now offering various discounts such as straight-up price discounts, deferred payment plans and other incentives like no pre-EMIs for under-construction properties, waiver of floor rise and car parking charges, free home furnishings, attractive gifts and so on to attract fence sitters and prospective home buyers.
With the residential prices holding steady along with various incentives offered by developers, the residential market is likely to witness an upward trajectory.
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