Real-estate activity seen picking up in June post second wave
June witnessed a pickup in real-estate demand, says a recent report by leading online property brokerage firm PropTiger.com. According to the report titled ‘Real Insight (Residential) – April-June (Q2) 2021’, half the sales in the April-June quarter of 2021 took place in June itself as states started to open up and remove restrictions. “Owing to the challenging situation during the April-June quarter in 2021, when infections and casualties caused by the Coronavirus hit a peak before subsiding towards the end of May, both demand and supply were hit during the first two months when most states put in place various restrictions and lockdowns to curb the spread of the virus,” says Dhruv Agarwala, Group CEO, Housing.com, Makaan.com & PropTiger.com. “However, some ground on both the numbers was covered during the month of June, when states started to open up. The same is reflected in Q2 demand and supply numbers. We expect improvement on both these indicators of residential real-estate health in the upcoming quarters as India’s vaccination programme is likely to gather pace.” “While the impact of the second wave of the virus was universal, some markets were impacted more as they were the hardest hit by the second wave of the pandemic,” says Mani Rangarajan, Group COO, Housing.com, Makaan.com & PropTiger.com. “This has been reflected in the high levels of unsold inventory and higher inventory overhang in markets like the NCR and MMR. This is especially true of the NCR market, where the inventory overhang is as high as the MMR even though the unsold stock in that market is less than half of what’s there in the MMR.”New supply remains resilient amid second wave; shows 74 per cent surge year on year (YoY) in Q2 2021A total of 21,839 new units were launched in India’s eight prime residential markets during Q2CY21. However, when compared to the same period last year, new launches show an increase of 74 per cent.Affordably priced housing continues to be the key focus area for India’s real-estate developers. In fact, 35% of the projects launched in Q2 were in the Rs.4.5-7.5 million price bracket, according to the report. And about 45 per cent of homes sold during the three-month period were priced up to Rs.4.5 million.Home sales decline 16% YoYWith 15,968 transactions being recorded across these eight markets during Q2, home sales during the three-month period ending June 30 declined 16 per cent YoY while registering a 76 per centquarter on quarter (QoQ) fall. All cities saw sales declining QoQ while annual comparisons show some improvement for few cities.Inventory overhang increases on the back of slow sales velocityWith a slight increase of 1 per cent QoQ, housing stock in these residential markets reached 711,215. inventory overhang. While the MMR and the NCR markets have the highest inventory overhang of 64 months each, Hyderabad had the lowest inventory overhang of 27 months. Even though Kolkata is now the city with the lowest number of unsold units, demand slowdown has kept its overhang higher than Hyderabad. On the other hand, the western markets of Mumbai and Pune hold the highest share of unsold stock, claiming a 54 per cent share in the overall stock.Out of the available stock in the top eight cities, nearly 23 per cent falls in the ready-to-move-in category, the report points out.