'A buyer's market': Home Sales Up 57% In Tier-1 Cities In India

NEW DELHI: Home sales across tier 1 cities of Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), national Capital Region (NCR) and Pune jumped 57 per cent, a report by Liases Foras Real Estate Rating & Research showed.

The top eight property markets sold 66,548 units in the September quarter (Q2 FY 21-22), an increase of 17 per cent compared to the preceding June quarter when 57,903 houses were sold, the report said.

The sales are largely driven by discounts and several schemes announced by builders. The jump could also be attributed to the 10-year-low home loan interest rates.

"It is a buyer's market," says Pankaj Kapoor, managing director of Liases Foras.

The pandemic-induced lockdown has been another big driver as people have realised they need more space in the house for work from home, education, quarantine among others. This trend can be seen in a detailed report by property consulting firm Knight Frank.

The report noted that share of sales in the ticket size of Rs 50 lakh to Rs 1 crore grew 35 per cent in third quarter 2021 compared to 32 per cent a year ago while the share of home sales in the under Rs 50 lakh ticket size category dropped to 43 per cent in Q3 2021 from 45 per cent a year ago.

Which cities saw the maximum sales?

As seen in the table below, sales witnessed maximum recovery in Bangalore by 99 per cent year-on-year, followed by Pune (69 per cent), Hyderabad (62 per cent), Ahmedabad (58 per cent), Chennai (57 per cent), MMR (56 per cent), NCR (35 per cent).

Sales also dipped:

Kolkata was the only city that witnessed a decline in sales. The dip can be attributed to the surge in the second wave of Covid-19.

On a quarterly basis, Ahmedabad was the winner with 45 per cent sales growth, followed by NCR (31 per cent), Pune (23 per cent), Chennai (15 per cent), Hyderabad (12 per cent), MMR (6 per cent), Bangalore (6 per cent), and Kolkata (2 per cent).

Tell me about prices:

Home prices, however, remained stagnant or unchanged in Bangalore, MMR, NCR and Pune on a quarterly basis. Chennai, however, saw prices increase by 3 per cent, while Ahmedabad and Hyderabad both saw a 1 per cent price increase. Kolkata was the only city that saw prices dip by a percentage.

On a yearly basis, the weighted average price across tier I cities increased 1 per cent. Hyderabad saw the maximum increase of 4 per cent, followed by Pune at 3 per cent, 2 per cent in Ahmedabad, Chennai and NCR.

Even on a yearly basis, prices dipped 2 per cent in Kolkata and 1 per cent in Bangalore. In Mumbai, prices remained the same.

Nobody is expecting prices to shoot up because....

Prices are unlikely to shoot up anytime soon because developers are looking at pushing sales to improve their cash flow because unsold stock has only marginally declined across cities in Q2 FY 21-22 and stayed at 896,404 units.

In fact, the unsold stock has increased in Hyderabad by 13 per cent and Ahmedabad by 9 per cent while it declined or remained nearly stable in MMR on a quarterly basis.

Months’ inventory ( a measure of how fast all the existing homes on the market would last) in these property markets stood at 40 months in September, easing from 48 months as in the June quarter.

"Overall months inventory decreased by 39 per cent on a YoY basis. In Bangalore, it decreased by 59 per cent, followed by Pune (46 per cent), Ahmedabad (39 per cent), MMR (37 per cent) Chennai (35 per cent), NCR (29 per cent) Hyderabad (18 per cent) and Kolkata by 4 per cent."

Is fresh supply coming into the market?

New launches across the Tier I cities are up 238 per cent on-year and 33 per cent on a quarter-on-quarter basis. In most of the cities, the September quarter saw the maximum launches in the last six quarter as restrictions eased nationwide and construction once again picked up after the second wave. New launches witnessed maximum growth in Ahmedabad (169 per cent) followed by MMR (48 per cent), Hyderabad (39 per cent), Kolkata (36 per cent), Pune (25 per cent), NCR (8 per cent).

Launches decreased in Bangalore by 39 per cent and Chennai by 9 per cent on a quarterly basis. Launches in Chennai finally reached to normal levels to 4,375 units from 175 units last year this time. Bangalore witnessed the maximum reduction in unsold stock by 9 per cent followed by Pune (5 per cent), Chennai (3 per cent), Kolkata (2 per cent) and NCR (1 per cent).

Tell me more about the two biggest markets-NCR and MMR

In the National Capital Region, Faridabad witnessed the biggest jump in sales (110 per cent), followed by

(52 per cent), Bhiwadi (36 per cent), Ghaziabad (25 per cent),Greater Noida (12 per cent).

In Mumbai Metropolitan Region, sales increased the most in Western suburbs (beyond Dahisar) by 35 per cent, followed by Thane 32 per cent, central Suburb by 31 per cent on a quarterly basis.

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Source: timesofindia.indiatimes.com