India recorded total sales of 99,416 residential units in the first half of 2021 (H1 2021) across top markets, while new launches in the same period (January-June 2021) were recorded at 103,238 units, according to a recent Knight Frank report. As sales volumes stabilised, especially in the early part of H1 2021, unsold inventory reduced by 1 per cent over the same period last year. Prices remained mostly contained with a reduction of -1 per cent to -2 per cent year on year (YoY).
H1 2021 saw a rise of 67 per cent YoY in sales volume with the first half of this period recording the larger part of total volumes. During the early part of this year, sales volumes were greatly influenced by two markets, Mumbai and Pune, which together constituted over 45 per cent of the total sales among key markets, notes the report. These two markets were given their orbital velocity by the Maharashtra government’s decision to lower stamp duty rates for a limited period. While residential sales started to show a resurgence, the momentum got impacted by the second wave of the pandemic starting towards the end of March 2021. Interestingly, the period of the second wave coincided with that of the first wave last year, which had brought the residential sales market to a screeching halt. Fortunately, the second wave, despite its extremely morbid potency, was less severe on the residential real-estate market.
New launches in H1 2021 were higher by 71 per cent YoY and were not surprisingly led by the two markets of Mumbai and Pune in Maharashtra.
All markets saw launches increase significantly as developers took measures to capitalise on the strength of demand. A majority of the new launches were recorded in the first quarter of the year, while the impact of the second wave in Q2 2021 was felt in equal proportion by developers, which impacted launches as well. Q2 2021 accounted for a little more than one-fourth of all launches in the first half of 2021. However, a comparison with the pandemic-affected quarter from a year ago shows that Q2 2021 has recorded a YoY growth of 388 per cent over Q2 2020.
“The gradual resumption of economic activity and increasing availability of the vaccine had sparked market traction in the second half of 2020 and this momentum carried over into Q1 2021,” observes Shishir Baijal, Chairman and Managing Director, Knight Frank India. “The second wave of COVID-19 infections has impeded this momentum but it should be seen as more of a speedbump as YoY growth in market volumes remains strong in half-yearly and quarterly terms in the January to June 2021 period. The limited period stamp duty cut that spiked home sales in Mumbai and Pune adequately demonstrates the need for policy-level intervention to revive the residential market. Going by the tremendous success of the stamp duty cut in Maharashtra, other states may also consider similar demand stimuli at appropriate times that will not only help sales velocity but also propel economic activity.”
