Despite spiralling COVID-19 cases in the second quarter of 2020, residential sales rose significantly. This provides sufficient reason to expect a significant increase during the upcoming festive season, which will prompt many fence-sitters to avail the best deals on offers. Developers have pulled out all the stops to attract buyers, announcing schemes for the festive season – many of which result in an actual reduction in the cost of acquisition.
Housing sales in Bengaluru are likely to increase by at least 30-35% during the October-December quarter, according to a report by property consultants Anarock. Housing sales in the city in Q3 of 2020 stood at 5,400 units. In Hyderabad, a 20-24% jump is expected in housing sales in Q4 2020 against the preceding quarter, when nearly 1,650 units were sold. In NCR, there is likely to be a 27-31% jump in sales in the festive season. As many as 5,200 units were sold in Q3 2020. Chennai may see a 20-25% rise in sales in Q4 2020 as against Q3 2020 when sales stood at 1,600 units. In MMR (Mumbai Metropolitan Region), housing sales in Q3 2020 stood at 9,200 units. The ongoing October-December period may see anywhere between 33-36% rise in sales.
Previous year’s trends suggest that housing sales across top cities in the festive quarter (Oct-Dec) mostly saw an uptick - anywhere between 5-10% - over the preceding quarter. This is largely because the festive season is considered most auspicious for property buying in India and developers also roll out various schemes and offers to lure buyers.
However, these offers come with an expiry date - when the housing market regains enough momentum, they will be withdrawn. Most end-users will aim to use this period to their advantage. The prevailing lowest-best home loan interest rates coupled with limited-period government incentives such as reduced stamp duty and registration charges in markets like MMR are added flavours to the festive treat.
The years 2016 and 2017 were a marked contrast - festive quarter sales in these years actually reduced against the preceding quarter, mainly because of structural reforms including Demonetisation, RERA (Real Estate Regulation Act) and GST (Goods & Service Tax), the report says. This year, the top 7 cities can cumulatively witness a 35% jump in housing sales in the ongoing festive quarter (Oct-Dec) against the July to September period, the report adds.
Moreover, the Q3 2020 base period saw nearly 29,520 units sold across the top 7 cities - much lower than the pre-COVID-19 quarter (Q1 2020) which saw nearly 45,200 homes sold. This effectively results in larger scope for growth. In all, housing sales are all set to rebound to 90% of the pre-COVID-19 levels (Q1 2020), the report notes.