Homes sales, new supply improve in 2021 driven by policy initiatives and improved buyer

National, February 20, 2022: Real estate activity in India’s leading housing markets intensified towards the second half of 2021, after a grim 18 months in which Asia’s third-largest economy was consistently battered by multiple waves of the coronavirus pandemic, shows the latest report by PropTiger.com, the country’s leading online real estate brokerage company.

According to the report titled Real Insight Residential – Annual Round-up 2021, home sales in India’s eight prime housing markets increased 13% in 2021, when compared to the overall sales in 2020. The figures include the sales numbers for all the four quarters in both calendar years.

A much sharper growth was seen in terms of new supply in 2021 as against 2020—a total of 2.14 lakh units were launched in 2021 compared to 1.22 lakh units in the preceding year, showcasing an upward swing of 75%.

This improvement in key growth metrics for the sector, the second-largest employment generator in India after agriculture, could largely be attributed to support measures launched by the government in the aftermath of the corona virus pandemic, improved consumer sentiment, stable prices and historically high housing affordability. 

Mumbai, Pune steer sales upswing

Builders sold 2,05,936 housing units for the full year 2021 as against 1,82,639 units in 2020. This growth in sales was largely driven by India’s financial capital Mumbai, where a total of 58,556 homes were sold in 2021. Closely following the Maximum City was its neighbor Pune, where a 9% jump resulted in sale of 42,425 apartments last year, the report by the Gurgaon-headquartered real estate firm shows. 

Flexible payment plans continue to keep home buyers inclined towards under-construction homes, which made up for 80% of the home sales during the year, the report adds. 

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research 

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research 

Buyer sentiment driving new launch wave

Amid a visible change of approach towards housing ownership among consumers in the aftermath of the pandemic, real estate developers in India stepped up efforts to offer better housing choices in 2021. As a result of this, barring Chennai where a marginal decline was seen, new supply showed a jump in all cities covered in the analysis during the year.

“Beyond the numbers which speak for themselves, what is remarkable is the resilience of the real estate market in India. Despite multiple waves of the pandemic, which resulted in multiple lockdowns, the residential real estate market has not only bounced back but is also on the cusp of a cyclical upturn. With policy support from the government and the low interest rate regime maintained by the RBI, I am very confident about the sector, entering into 2022,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com&PropTiger.com. 

“Developers have been quick to respond to the positive changes in buyer sentiment, as evidenced by the offers available in the market, especially during the festive season of 2021, which resulted in improved metrics for both, demand and supply.  Basis the data available with us, it seems very likely that we will see an increase in prices in 2022, even as the inventory overhang continues to decline in 2022. The biggest trend we foresee is that the real estate market will continue to consolidate its growth in 2022 as well,” said RajanSood, Business Head, PropTiger.com. 

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research 

Increase in raw material price pushed property prices up in 2021

Consistent increase in raw materials prices is pushing up property prices, with all eight prime residential markets covered in the report showing annual increase in per square foot price of new properties. Ahmedabad and Hyderabad housing markets were leading this pack, with an annual price hike of 7% each in 2021.

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research 

Inventory overhang declines to 3.5 years

The improvement in sales in 2021 has been instrumental in lowering the inventory burden for India’s real estate developers. Consequently, inventory overhang — the estimated time builders would take to sell off the existing unsold stock, based on the current sales velocity— has now declined to 42 months. As on December 31, 2021, builders had an unsold stock consisting of 7,26,943 units in India’s eight housing markets.  While the inventory overhang is the highest for the Delhi-NCR market at 68 months, it is the lowest for Kolkata, at 31 months.  

Source: Real Insight Residential – Annual Round-up 2021, PropTiger Research

Corporate Comm India (CCI Newswire)