COVID 2nd wave: Housing sales may dip this quarter; demand to revive in July-Dec

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New Delhi, May 21 (PTI) Housing sales may decline year-on-year during the April-June quarter across eight major cities on sluggish demand due to the second wave of COVID-19 pandemic, a senior company official of PropTiger said on Friday.

However, sales are expected to bounce back during the second half of the 2021 calendar year on pent-up and festival demand, PropTiger Chief Operating Officer (COO) Mani Rangarajan told reporters.

According to PropTiger, housing sales fell drastically at 19,038 units in April-June last year across eight cities from 92,764 units in the year-ago period because of the nationwide lockdown.

Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Hyderabad, Chennai, Kolkata, and Ahmedabad are the eight cities tracked by PropTiger.

'We may see a decline in housing sales' across eight cities during this quarter as compared with the corresponding period of the previous year, said Rangarajan in a webinar on the Hyderabad market.

He said it's difficult to estimate the quantum of fall in percentage terms.

Rangarajan, who is also COO of Housing.com and Makaan.com, said sales were decent in April but have been adversely impacted this month.

The Delhi-NCR market is worst affected, he added.

'Real Estate will bounce back strongly and we will see a solid recovery.' With a fall in infections in Maharashtra, Rangarajan said the demand in MMR and Pune will revive quickly.

Ankita Sood, Head of Research at Housing.com and PropTiger, said prospective home buyers are searching for properties on its realty portals, indicating that demand will bounce back once the second wave subsides.

Meanwhile, PropTiger said in a statement that Hyderabad has reported the maximum increase of 39 per cent year-on-year in housing sales during the January-March period of this calendar year.

The hi-tech city also has the lowest inventory overhang (time required to liquidate unsold inventories) of 25 months despite a sharp rise in new supply.

As per PropTiger.com recent research report “Real Insight – Q1CY21”, housing sales in the IT city increased by 39 per cent to 7,721 units in January-March this year from 5,554 homes sold in the same period of the 2020 calendar year.

On the supply side, Hyderabad saw a jump of 95 per cent in new launches to 7,604 units in the first quarter of this calendar year.

Due to the sharp rise in new supply, the unsold housing stock in the city rose 26 per cent year-on-year to 39,191 units.

Considering the current sales velocity, the rise in the numbers of unsold housing units is not a concern.

Among the eight major cities in the country, Hyderabad has the lowest inventory overhang of 25 months, which means it would take little more than two years for builders to sell all of these unsold units.

The inventory overhang for all eight cities is around four years on average and ranges approximately between 3 to 5 years for all cities other than Hyderabad.

Housing prices in Hyderabad appreciated by 5 per cent year-on-year during January-March 2021.

The weighted average price in the city is Rs 5,713 per square foot. PTI MJH SHW SHW