Coronavirus Destroys Real Estate: Sales Down By 79% In Top 8 Indian Cities, Hyderabad Worst Impacted
In the current situation of virus spread, most cities are in a partial or full lockdown, has affected the property sale tremendously as new launches hit by 81 percent and housing sales by 79 percent during the June quarter of this fiscal year.
How Did This Happen?
According to PropTiger, only 19,038 units were sold during April-June quarter compared to 92,764 units in Q2 2019.
PropTiger said that affordable housing continued to dominate the real estate sector accounting for a 44 percent share of all sales, as per the information given in its report Real Insight Residential Q2 2020.
While the sales share of branded developers increased comparatively.
Apart from the sales, the new launches majorly reduced during this time due to developers remained wary of commercial activity across sectors slowing down.
Launches decreased 81 percent during the quarter ending June 30 to 12,564 units from 65,240 units last year. The first half of this calendar year showed a similar decline with a 65 percent dip in new launches.
What About Metropolitans?
Talking about the big cities, Bengaluru has seen the maximum supply of new launches in this quarter, as per the report.
On the other hand, new launches in Mumbai were reduced by 91 percent from 21,250 in Q2 2019 to 1,820 this year.
While, in Delhi-NCR, the New launches decreased by 75 percent to 2,010 this year from 7,920 in 2019.
Similarly in Bengaluru, the new launches were hit 52 percent to 3,270 this year from 6,840 last year.
Unsold Stock Declines
Moving ahead with the report, the unsold stock also witnessed a decline by 13 percent in the eight cities caused due to reduction in new launches.
The developers had an inventory of 738,335 units across these markets by the end of June 30, 2020, compared to the 846,460 units At the end of Q2 2019.
Moreover, nearly 20 percent of the unsold inventory is in the ready-to-move-in category, according to PropTiger.
With the lack of demand, the price growth in India’s prime residential markets remained largely unchanged in the majority of cities showing an annual growth between 1-3 percent in the past year.
While housing markets of Hyderabad and Ahmedabad showed comparatively stronger growth seeing the demand.
The weighted average price increased by 7 percent and 6 percent in Hyderabad and Ahmedabad, respectively, compared to the level seen in Q2 2019.
Majorly, launches seen decline across cities, especially in Mumbai, Pune, Kolkata and Chennai.
The Mani Rangarajan, Group COO, Housing.com, Makaan.com & PropTiger.com, “the current pandemic is an unprecedented Black Swan event that is expected to contract growth in the global economy, including that of India. As anticipated, demand was adversely impacted due to economic uncertainty combined with growing unemployment; in fact, our recent Housing-NAREDCO buyer survey indicated buyers have pushed back their purchasing decision up to a year,”.
He said that developers are increasingly offering schemes such as flexible payment plans, selective discounts and price protection plans to attract buyers, developers are understandably cautious and are focused on completing existing projects.