Focus on affordable segment continues in Q1 2021

Residential sales in first quarter (Q1 Jan-March) of 2021 recovered to more than 90 per cent of the volumes witnessed in Q1, 2020 (pre-Covid) across the top seven cities, according to a latest report from JLL.

The report 'Residential Market Update-Q1, 2021' revealed that the cities including Chennai, Hyderabad, Kolkata, and Pune surpassed the sales volumes of Q1 2020. Overall sales increased by 17 per cent on a sequential basis.

Hyderabad - the Western Suburbs (Gachibowli, Manikonda, Kukatpally) submarket accounted for more than 65 per cent of the sales during the quarter. Dr Samantak Das, chief economist and head (research & REIS), JLL, said: "The sustained growth in sales presents clear signs of demand and buyer confidence coming back to the market.

This has been on the back of historically low home loan interest rates, stagnant residential prices, lucrative payment plans and freebies from developers and government incentives such as the reduction of stamp duty in states like Maharashtra and Karnataka (for affordable housing).

The ease of lockdown restrictions and the commencement of the vaccination drive have further aided in bringing buyers back to the market." Importantly, sales either improved or stayed at similar levels (in Q1 2021 when compared to Q4 2020) in majority of the residential markets under consideration.

Mumbai has consistently been the largest contributor to sales in the last four quarters. In Q1, 2021, Mumbai accounted for 23 per cent of the sales, followed by Delhi NCR with a share of 21 per cent.

However, Kolkata saw the maximum increase in sales activity in Q1, 2021, in comparison to the fourth quarter of 2020. In Kolkata, the offtake of residential units in Q1, 2021, was driven by South Suburbs (Joka, Kasba, Behala, Jadavpur, Tollygunje) and East Suburbs (EM Bypass, Rajarhat, Topsia) with a combined contribution of more than 70 per cent.

Residential market reached more than 90 per cent of pre-Covid sales Q1 2020 (in units) Q1 2021 (in units). "In the fourth quarter of calendar year 2020, India's economy returned to growth territory, recording a 0.4 per cent rise in GDP.

In tandem with the GDP growth, the pace of recovery in the residential market intensified with sales increasing by 51 per cent, when compared to the previous quarter. In Q1 2021, sales of residential units continued an upward trajectory.

Sales, at the overall level, increased by 17 per cent on a sequential basis," Das added.

The Covid-19 pandemic tilted the scale further in favor of established developers.

As the sector shows signs of recovery, prominent developers are expected to be at an advantage and capture a greater share of the market. Homebuyers have become even more cautious in their home purchase decisions.