New launches in the Mumbai residential market place elevated by 33%, from 4,616 units in Q1 2021 to 6,143 units in Q2 2021, as per a current study by JLL. While sales in the city remained at comparable levels of Q1 2021, transactions had been concentrated in the price tag segment of Rs 50 lakh to Rs 1 crore, which accounted for 40% of the sales through the quarter.
Eastern suburbs accounted for the majority of new launches with 25%, followed by Western suburbs II (comprising of Malad, Kandivali, Borivali and Dahisar) with 22%. In terms of sales, Thane and Navi Mumbai combined reported close to 50% of sales. When compared to Q1 2021 capital worth of residential units in the city remained steady in Q2 2021.
Further, most of the new launches in Mumbai had been in the cost-effective and mid segment (ticket size upto Rs 2 crore) and formed 84% of the launches through the quarter. In sync with demand, developers are anticipated to focus on these price tag segments.
Karan Singh Sodi, Regional Managing Director, JLL India mentioned, “The increase in sales presents clear signs of demand and buyer confidence coming back to the market. This has been on the back of historically low home loan interest rates, stagnant residential prices, lucrative payment plans and freebies from developers and government incentives such as the reduction of stamp duty.”
Mumbai has regularly been the biggest contributor to sales more than the previous 5 quarters and the trend continued in Q2 2021 as nicely. Almost one-third of the sales volume was contributed by the city through the quarter.
Residential sales across the prime seven cities in Q2 (April-June) 2021 elevated by 83% as compared to Q2 2020, across the prime seven cities. According to JLL’s Residential Market Update – Q2 2021 released not too long ago, this was primarily due to low base impact, much less stringent lockdowns, and accelerating vaccination drives through Q2 2021, demonstrating enhanced resilience in the market place.
During the 1st wave of COVID-19, residential sales dropped by a record 61% quarter-on-quarter to 10,753 units in Q2 2020. However, the effect of the second wave has been restricted with sales in Q2 2021 dipping by 23% to 19,635 units.
Dr. Samantak Das, Chief Economist and Head Research & REIS, India, JLL mentioned “The residential sector displayed improved resilience in Q2 2021 when compared to Q2 2020. There is no denying the fact that the second COVID-19 wave dented the market following a good recovery curve. However, the impact was muted when compared to the same period last year. Most of the changes observed in the sector have been structural in nature and demand for homes is only expected to increase. The RBI is expected to hold policy rates at the existing historically low levels, while prices will remain mostly range bound. The resultant affordable buoyancy will continue to attract fence sitters and serious homebuyers,”.
“If the downward trajectory in COVID-19 cases is sustained, the sector is expected to make a healthy recovery in the second half of 2021,” he added.
Established developers will continue to run the show
Structural reforms inside genuine estate in the last handful of years began the procedure of weeding out smaller sized, unorganised developers from the market place. The COVID-19 pandemic tilted the scale additional in favour of established developers. Homebuyers have also come to be even more cautious in affecting their home acquire choices. There is an elevated preference and willingness to spend a premium for projects by developers with an established track record.
New launches anticipated to go up in H2 2021
On typical, new launches of more than 35,000 units had been witnessed every single quarter in between Q1 2019 and Q1 2020. In the COVID-era (Q2 2020 – Q2 2021), this has decreased to ~23,000 units.
Sustained development of the sector in the second half of 2021
There is no denying the truth that the second COVID-19 wave dented the market place following a superior recovery curve. However, the effect was muted when compared to the exact same period last year. Most of the modifications witnessed in the sector have been structural in nature and demand for properties is only anticipated to boost. Importantly, lockdown restrictions across cities are getting eased and the vaccination drive is gathering pace. If the downward trajectory in COVID-19 instances is sustained, the sector is anticipated to make a healthful recovery in H2 2021.