The Delhi NCR region, driven by low interest rates and lucrative plans witnessed an improvement in sales by 38% Q-o-Q. Most of this traction was witnessed in Noida, contributing nearly 48% to the overall sales as it caters to all price segments. This was followed by Ghaziabad constituting 31% of the sales and it mainly caters to mid and affordable segments. Gurugram accounted for nearly 1/5th of the overall sales during this quarter. As per a JLL report, SURFACES REPORTER (SR) shares some of the key points:
The emerging corridors of suburban markets such as Noida-Greater Noida Expressway, Golf Course Extension Road and Dwarka Expressway in Gurugram continue to drive sales on the back of expected augmentation in physical and social infrastructure in these markets.
Three projects were launched during the third quarter, two in Gurugram and one in Noida. While launches were in high-end and upper mid segments in Gurugram, the projects launched in Noida catered to mid segment buyers.
Manish Aggarwal, Managing Director, Delhi NCR, JLL India, said, “With the upcoming festive season, sales are only expected to increase from the current levels. Also, attractive pricing and developers doling out lucrative schemes and freebies will further incentivise fence sitters to effect buy homes. It is interesting to note the growing acceptance of digital platforms amongst both developers and homebuyers to effect transactions.”
Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL said, “The further easing of lockdown restrictions and the upcoming festive season might help in bringing buyers back to the market. An assessment of years to sell reveals that the expected time to liquidate stock has increased from 3.6 years in Q2 2020 to 4 years in Q3 2020. While the residential space remains unpredictable, favourable supply dynamics could deliver potential upside for both homebuyers and developers in the medium-term,”.
- Residential market in India, on road to recovery with strong sales
India’s residential market was more active in Q3 2020 with sales increasing by 34% versus Q2 2020. Mumbai accounted for 29% of the total sales in the quarter, while 22% of sales was contributed by Delhi NCR. Growth in sales activity was also driven by stronger demand in Chennai, Hyderabad and Pune.
- Sales volumes increased across markets
Residential market activity all over India, is also being supported by renewed interest from NRIs in Q3 2020, resulting in more pent up demand in the market and increased enquiries received by developers.
- Focus on mid and affordable segment continues
New launches were restricted with 12,654 units launched in the third quarter, a decline of 14% quarter-on-quarter. Developers focused on completion of under construction projects and clearing their existing inventory. Hyderabad and Mumbai accounted for over 60% of the total new launches in the quarter. The drop in new launches was driven by Bengaluru, which witnessed a substantial decline of over 80% as compared to Q2 2020. Development focus on mid and affordable segments continued in Q3 2020 with nearly 75% of the new launches in the sub INR 1 crore category.
- Unsold inventory dips across the country
Q3 2020 witnessed sales outpacing new launches as unsold inventory across the seven markets (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata) decreased marginally from 459,378 to 457,427 units. Mumbai and Delhi NCR together account for more than 50% of the unsold stock which are at various stages of construction.
Over the last few years, residential prices in most markets have remained stagnant. Developers have been operating with low margins and the chances of a significant reduction in prices is unlikely.
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