Indian real-estate sales likely to witness decline of 40-50%
The overall primary sale of real estate in India will witness a deduction of around 40-50% in the top 10 cities in 2020, as per a CRISIL report. The market in southern India, with a larger share of branded developers, has performed better than the rest of the country. The first half of the fiscal year 2020-21 witnessed a decline of 10-20% for the top seven listed developers while there has been a 40-50% decline in the top 10 cities, indicating a shift towards the key developers. CRISIL mentioned this trend was on display ahead of the pandemic and is expected to extend over the second half. New house sales witnessed a surprise surge in the past couple of months, making the global pandemic-led disruption look like a mere blip. CRISIL stated the units sold in Mumbai and the rest of Maharashtra are 1.1 - 1.3 times higher compared with January this year. The spurt rides on supportive measures from governments in key states. For instance, Maharashtra has reduced stamp duty by 3%, making it 2% up to December 2020 and 3% up to January 2021. Karnataka has also decreased stamp duty by 2% for properties priced between Rs 2.1 million to Rs 3.5 million. The buyer-centric market seems favourable for first-time homebuyers and fence-sitters as well as resale-flat buyers. There's also a renewed interest in sales for non-resident Indians. With 'ready to move' inventory constituting 10-20% of the total inventory in key cities and upcoming supply this fiscal at similar levels, capital values are likely to remain under pressure at least for the rest of this fiscal year. Although the overall rebound in real estate demand in October was faster than anticipated, its sustenance after the festive season will be monitorable, said CRISIL.
