Housing Market Rebounds: Q4 2021 Records Best Quarterly Home Sales Since 2015
Data from property consultancy Anarock shows home sales in the seven major cities rose 71% year-on-year in 2021 to 2,36,530 units from 1,38,350 units in 2020, although demand is lower to pre-Covid levels by ten%. The Mumbai metropolitan area recorded the highest sales with 76,400 units, followed by NCR with around 40,050 units sold.
Of all the launches, the mid-segment (Rs 40 lakh to Rs 80 lakh) had the maximum share with 39%, followed by the affordable segment (priced below Rs 40 lakh) with a share of 26%. The premium segment (price between Rs 80 lakh and Rs 1.5 Cr) had a share of 25%.
“Despite the pandemic, 2021 has been a fantastic year for the Indian housing sector. More or less an equal number of homes were pitched and sold. The fact that launches are back to pre-COVID levels is very significant, and home sales were down just 10% from 2019. Of the four quarters, Q4 2021 was by far the best, with home sales in the top 7 cities hitting a new high of around 90,860 units in Q4 2021. This is the strongest quarterly sales performance. high since 2015,” said Anuj Puri, President – ANAROCK Group.
A huge rise in home ownership aspirations has been supported by rebates and offers for developers, government incentives such as Maharashtra stamp duty reductions and lenders keeping interest rates low for a decade, added Pure.
Similarly, data analyzed across the top eight cities by Knight Frank India shows that new home launches also saw a significant 58% year-on-year increase with the addition of 232,382 units in 2021.
According to Knightfrank, Mumbai (34,382), the National Capital Region (23,599) and Bangalore (23,218) were the main players in residential sales in the second half of 2021. Hyderabad and Bangalore recorded the highest house sales (in terms of percentage growth) during the second half. 2021 at 135% and 104% YoY respectively. In calendar year 2021, Mumbai (62,989), Bangalore (38,030) and Pune (37,218) led in terms of sales.
From a half-yearly sales perspective, the second half of 2021 saw the highest sales volume since the first half of 2016. Low interest rates, better affordability and renewed interest in home ownership due to the space constraints imposed by the pandemic, were the main drivers of this recovery in demand.
Despite the closure of the stamp duty reduction window in March 2021, Mumbai and Pune accounted for 41% of home sales in the second half of 2021.
Homebuyers in the IT sector led the markets were relatively less affected by the pandemic-induced disruptions, which is why Hyderabad and Bangalore led the sales growth markets (in percentage) in the countries in the second half of 2021.
In terms of 12-month residential price change, Chennai, Hyderabad and Bangalore recorded increases of 7%, 5% and 4% respectively. Mumbai saw a marginal increase of 1%.
Prices were recorded as stable in Pune, Kolkata and Ahmedabad. The National Capital Region recorded a marginal decline of 1%.
According to Knight Frank, the share of sales in the INR 10 min category increased from 21% to 23% during the same reference period.
“The low interest rate regime makes the market conducive for home buyers to purchase residential property. Low interest rates, effective government interventions and speed of sales make the Indian residential market a prime investment asset class for global institutional investors. Mumbai is leading India’s residential asset recovery and hit a new high with over 232,903 home sales during the year,” said Dhaval Ajmera, Director, Ajmera Realty & Infra.
2022, however, will see prices increase by 5-8%, Puri said. He added that sales would reach pre-COVID levels in 2022 and demand would consolidate towards trusted developers.