Real estate demand continued to recover in the January-March quarter, with steady rise in sales to 71,963 units across the top eight cities, according to a report by Knight Frank India. Sales during the previous quarter of October-December stood at 55,033 units.
"Quarterly sales volumes have steadily improved since Q2 2020 and have surpassed the 2019 pre-COVID quarterly sales average in Q1 2021. Considering that this is the second consecutive quarter to cross the 2019 quarterly sales average, we believe that the market is recovering well, if not having done so already. 71,963 units were sold during Q1 2021, 44 per cent more than in Q1 2020," it said.
This healthy growth in sales also encouraged developers to launch new projects which is reflected in the 76,006 units launched during the quarter, a substantial growth of 38 per cent on a year-on-year (yoy) basis.
Mumbai and Pune led the table in both launches as well as sales. These two markets benefited from significant regulatory impetus in the form of discounts in stamp duty charges that led to significant improvement in sales velocity.
While end users were keen on taking advantage of the reduced stamp duty regime, developers also thought it right to take advantage of the said growth to launch new projects. In the last few weeks of Q1 2021, Karnataka also doled out stamp duty sops to home buyers for residences costing up to Rs 45 lakh. However, the impact of this may only be seen in the subsequent quarters, the report said.
The increasing sales volumes have also arrested the intensity of the yoy fall in residential prices of most markets while Hyderabad and the National Capital Region (NCR) have seen a marginal growth in prices compared to a year ago.
Knight Frank India Chairman & Managing Director Shishir Baijal said: "Q1 2021 saw a significant rise in sales across the key markets, led by Mumbai and Pune, the two markets that received substantial backing from the state government in the form of reduced stamp duty. Other cities also recorded a rise in sales of homes due to a shift in attitude in homebuyers that has now started to prefer ownership."
"That coupled with home loan interest rates at multi-decade lows of sub-7 per cent, a substantial correction in apartment prices, as well as increase in household savings, seems to have convinced homebuyers that this was an opportune time to purchase their properties," he said.
Baijal was of the view that while the sentiments have remained largely positive in the first quarter leading to consistent rise in home sales, the recent spike in COVID-19 cases in the country has to be factored in for the future.