Residential marketplace in Delhi NCR gained additional momentum in Q1 2021 (Jan-March, 2021) with an raise in new launches as effectively as sales. New launches in Q1 2021 more than doubled on a sequential basis. Majority (55%) of the launches have been witnessed in Noida with launches by reputed developers. Gurugram contributed 25% of the new launches. These have been primarily concentrated in Golf Course Extension Road and Dwarka Expressway.
In this quarter, most of the new launches have been in the upper mid (Rs 10-15 million) and higher-finish (> Rs 15 million) cost segments with projects in premium places gaining traction.
In terms of demand, sales registered an uptick by 23% as compared to the last quarter. New project launches for the duration of the quarter garnered very good demand traction as purchasers preferred projects by established developers with verified execution capabilities. Noida accounted for almost half (49%) of the units sold followed by Ghaziabad which contributed 27% of the all round sales in Delhi NCR.
“With improved infrastructure and quality projects at attractive prices, the submarket has emerged as a lucrative option for mid-segment homebuyers. Prices remained range bound across all the submarkets as developers focus on offloading the unsold inventory and drawing buyers with attractive payment terms,” stated Manish Aggarwal, Managing Director, North & East India, JLL India.
Residential sales revive across India
Residential sales in Q1 (Jan-March) 2021 recovered to more than 90% of the volumes witnessed in Q1 2020 (pre-Covid) across the prime seven cities. The cities which includes Chennai, Hyderabad, Kolkata, and Pune surpassed the sales volumes of Q1 2020. Overall sales enhanced by 17% on a sequential basis. Importantly, sales either enhanced or stayed at equivalent levels (in Q1 2021 when compared to Q4 2020) in majority of the residential markets beneath consideration. Mumbai has regularly been the biggest contributor to sales in the last 4 quarters. In Q1 2021, Mumbai accounted for 23% of the sales, followed by Delhi NCR with a share of 21%.
However, Kolkata saw the maximum raise in sales activity in Q1 2021 in comparison to the fourth quarter of 2020. In Kolkata, the offtake of residential units in Q1 2021 was driven by South Suburbs (Joka, Kasba, Behala, Jadavpur, Tollygunje) and East Suburbs (EM Bypass, Rajarhat, Topsia) with a combined contribution of more than 70%.
The sustained development in sales presents clear indicators of demand and purchaser self-confidence coming back to the marketplace. This has been on the back of historically low residence loan interest prices, stagnant residential costs, profitable payment plans and freebies from developers and government incentives such as the reduction of stamp duty in states like Maharashtra and Karnataka (for reasonably priced housing). The ease of lockdown restrictions and the commencement of the vaccination drive have additional aided in bringing purchasers back to the marketplace,” stated Dr. Samantak Das, Chief Economist and Head Research & REIS, JLL.
“However, the rising concerns of the rapid spread of the pandemic has compelled several state government to lay and enforce stringent lockdown like restrictions. While this is essential to break the chain, it is likely to impact real estate business in the next few months. At the same time, the rapid progress in the rollout of vaccines paired with the ongoing restrictions provides us elbowroom to believe that this is a short-term blip and the market will be back on track sooner than later,” he added.
Buyer’s’ marketplace with cost continuing a downward trend
Residential costs in the majority of India’s residential markets have remained stagnant in the previous handful of years. In Q1 2021, costs remained largely stagnant when compared to the preceding quarter, across all the seven markets beneath critique. This getting stated, it is essential to point out that handful of developers in specific markets are giving moderate cost discounts to enhance sales.
Moreover, developers are providing appealing freebies which includes payment schemes such as no EMIs for a year, no stamp duty and so on to attract homebuyers who pressed ‘pause’ in the last handful of months. This has led to a reduction in ‘effective costs. This rationalisation combined with decreased residence loan prices has additional enhanced affordability in the residential marketplace.