With lowest inventory overhang, Hyderabad leads in housing sales
Half of sales in Q2 took place in June with States easing lockdown curbs
New Delhi: Realty estate has been experiencing a tumultuous growth in India in the first quarter of 2021-22 financial year, with sales and demand registering a pick-up in the residential segment only in the month of June. According to a report titled Real Insight (Residential)--April-June (Q2) 2021,' half of the sales in the April-June quarter of 2021 took place in June itself as States started to open up and remove restrictions.
"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. This has been reflected in the high levels of unsold inventory and higher inventory overhang in markets like the NCR and MMR," says Mani Rangarajan, Group Chief Operating Officer, Housing Dot Com.
In an unprecedented success, Hyderabad has emerged as one of the leading areas in housing sales with the lowest inventory overhang of 27 months. The housing survey was conducted in Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi NCR and Mumbai MMR, and Pune for the first quarter of FY 21-22. The region of Hyderabad, as per the survey report, has registered an annual growth of five percent with the average price at Rs 5,790 per square foot, second highest after Mumbai MMR with Rs 9,475 per square foot.
Rangarajan said that in an overall national trend, housing sales in second quarter showed decline on a year-on-year (YoY) basis. With 15,968 transactions being recorded across these eight markets during the second quarter, home sales during the three-month period ending June 30 declined 16 percent YoY while registering a 76 percent Quarter on Quarter (QoQ) fall.
Experts observed that the sales took a hit only during the second week of April, once the second wave of the pandemic became devastating, pushing home buyers to hold their plans to invest in property. This is in spite of the fact that home loan interest rate, are at an all-time low in 15 years, making realty as lucrative investment option.
The report suggests that 45 percent of homes sold during the three-month period were priced up to Rs 45 lakh. Ankita Sood, Head of Research, Housing Dot Com said that "cities like Hyderabad, Bangalore and Mumbai have been the key areas which contributed to the maximum new supply in the country.The price bracket which has actually emerged more prominent in the new supply again is the Rs 45 lakhs to Rs 75 lakhs price bracket with Hyderabad taking the maximum growth share." The report further indicated that homebuyers were less interested in finished housing with ready-to-move-in properties dropping by 16 percent. According to Rangarajan, the reason behind this decline can be attributed to the fact in the developers have come out with attractive discounts and schemes, in the under-construction space, to attract buyers. He further noted that approximately five lakh units are likely to be delivered by the end of 2021.
"There has been a very meagre contraction in the unsold inventory of only close to four percent. There has been a lot of influx of new supply but because of the slow sales velocity, the inventory overhang or the number of months to exhaust that inventory has gone up from 35 months in the second quarter of 2020 to 48 months right now which is approximately four years," Sood added.