Residential sales surge by 47% year-on-year during Jan-Sept 2021: JLL

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• Robust sales traction in Q3 2021 drove year to date sales

• Sales of more than 32,300 residential units were recorded in Q3 2021

• Sales volume in Q3 surpassed the sale volume recorded in the pre-Covid period of Q1 2020 by 18%.

• Hyderabad saw highest new launches forming 28% of overall new launches during Q3 2021

• Most new launches in larger markets of Bengaluru, Mumbai and Delhi NCR were in affordable & mid segments

New Delhi, October 09, 2021: Residential sales during January-September 2021 increased by 47% as compared to the same period last year across the top seven cities, according to JLL’s Residential Market Update – Q3 2021, released today. This implies that the second wave had limited impact on sales in the first three quarters of 2021. On a sequential basis, sales improved by 65% during Q3 2021. Sales got a boost from many factors including lower Covid-19 cases in Q3 backed by robust vaccination drive which led to cautious unlocking of the economy in various states.

Strong recovery in sales 

City

Q2 2020

(in units)

Q3 2020

(in units)

Growth (%)

Q3 2020 over

Q2 2020

Q2 2021

(in units)

Q3 2021

(in units)

Growth (%)

Q3 2021 over

Q2 2021

Bengaluru

1977

1742

-12%

3500

5100

46%

Chennai

460

1570

241%

600

1500

150%

Delhi NCR

2250

3112

38%

2440

6689

174%

Hyderabad

1207

2122

76%

3157

4418

40%

Kolkata

481

390

-19%

578

1974

242%

Mumbai

3527

4135

17%

5821

6756

16%

Pune

851

1344

58%

3539

5921

67%

Total

10753

14415

34%

19635

32358

65%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Data includes only apartments. Row houses, Villas and Plotted developments are excluded from our analysis

Source: Real Estate Intelligence Service (REIS), JLL Research

“Developers have already started launching optimal sized apartments to capture changing consumer preference across most of the cities. Indian residential sector is expected to witness sustained growth in the coming quarters. The renewed buyer’s confidence has been instrumental in the recovery of the housing market in Q3 2021, which recorded good volume of sales and launches as compared to the same period last year and almost inching towards the pre-covid era. Sales of more than 32,300 residential units were recorded in Q3 2021 against 19,635 units in Q2 2021, a significant increase of 65% Q-o-Q,” said Siva Krishnan, Head – Residential, India, JLL.

After a lull phase in Q2 2021 owing to the resurgence of the pandemic and restrictions imposed by various state governments, sales gained momentum during Q3 2021 as the country began to cautiously return to normal economic activities supported by aggressive vaccination drive. The growing need for home ownership supported by lower mortgage rates and stable employment scenario drove the housing demand in Q3 2021. Mumbai has consistently been the largest contributor to sales over the past five quarters. During Q3 2021, Mumbai and Delhi each accounted for 21% of the total sales followed Pune and Bengaluru. Recovery well underway as sales surpassed pre-covid levels.

“Sales volume during the quarter surpassed the sale volume recorded in the pre-Covid period of Q1 2020 by 18%. At the same time, it is encouraging to note that the sales volume during the quarter is inching closer to the average quarterly volume of sales recorded in the pre-covid era of 2019, which stood at about 35,000 units. This certainly indicates that the market sentiments are improving compared to the previous year and bringing back buyer’s confidence in the market. Further reduction in home loan rates coupled with the festive season and improved market sentiments augurs well for the residential sector,” said Dr. Samantak Das, Chief Economist and Head Research & REIS, India, JLL.

Second wave had limited impact on YTD sales  

City

YTD 2020

(in units)

YTD 2021

(in units)

Growth (%)

Bengaluru

7905

10982

39%

Chennai

4483

5300

18%

Delhi NCR

11303

14577

29%

Hyderabad

6356

11284

78%

Kolkata

2130

3872

82%

Mumbai

14519

18356

26%

Pune

5923

13205

123%

Total

52619

77576

47%

YTD – January to September

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Data includes only apartments, Row houses, Villas and Plotted developments are excluded from our analysis

Source: Real Estate Intelligence Service (REIS), JLL Research 

The cities were quick to bounce back from the impact bringing back buyer’s confidence into the market once the economy began to show signs of recovery and a growth trajectory for future. The increased momentum of the vaccination drive has further aided in limiting the impact of the second wave.

New launches scale up 

City

Q2 2020

(in units)

Q3 2020

(in units)

Growth (%)

Q3 2020 over

Q2 2020

Q2 2021

(in units)

Q3 2021

(in units)

Growth (%)

Q3 2021 over

Q2 2021

Bengaluru

6135

1074

-82%

4833

4595

-5%

Chennai

182

1487

717%

392

391

 

Delhi NCR

0

699

 –

1048

4073

289%

Hyderabad

5034

5396

7%

10980

9145

-17%

Kolkata

0

0

 –

206

1173

469%

Mumbai

2294

2242

-2%

6143

6084

-1%

Pune

1135

1756

55%

3455

7402

114%

Total

14780

12654

-14%

27057

32863

21%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Data includes only apartments, Row houses, Villas and Plotted developments are excluded from our analysis

Source: Real Estate Intelligence Service (REIS), JLL Research

The top seven cities under consideration witnessed new launches of 32,863 units in Q3 2021, an increase of 21% Q-o-Q. As the economy began to improve and with the festive season around the corner, developers continued to launch residential projects across the country. Most of the new launches in the markets of Bengaluru, Mumbai and Pune were in affordable and mid segments.  Hyderabad continued to dominate new launches and accounted for about 29% of launches during Q3 2021. Pune and Mumbai, which contributed 23% and 19% respectively to the overall new launches followed.  The markets of Kolkata, Delhi NCR and Pune witnessed a substantial increase in launch activities during Q3 2021, when compared to the same period last year as well as from the previous quarter. Development focus on mid and affordable segments continued in Q3 2021 with 77% of the new launches in the sub-INR 10 million category.

Developers continue to be cautious towards launches 

Although Q3 2021 witnessed healthy launches, new launches continued to remain below par when compared to pre-covid quarter of Q1 2020 (around 40,500 units) and the average quarterly launches witnessed in 2019 (around 34,000 units). Developers remain cautious in launching new projects as they are focused on off-loading their unsold inventory and recovering sales volume of the past few quarters. Developers are largely aligning their launch strategies in sync with actual market demand, thereby keeping the market fundamentals robust.

Launches expanded by 38% YTD 

City

YTD 2020

(in units)

YTD 2021

(in units)

Growth (%)

Bengaluru

18785

14897

-21%

Chennai

4243

5819

37%

Delhi NCR

3720

9855

165%

Hyderabad

13379

28716

115%

Kolkata

2098

1962

-6%

Mumbai

16279

16843

3%

Pune

9504

15781

66%

Total

68008

93873

38%

YTD – January to September

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Data includes only apartments, Row houses, Villas and Plotted developments are excluded from our analysis

Source: Real Estate Intelligence Service (REIS), JLL Research

The first three quarters of 2021 witnessed launch of 93,873 units registering a significant increase of 38% compared to the same period last year. Improving markets sentiments on the back of improved economic activities and the upcoming festive seasons have instilled confidence amongst developers as they strategically launch projects across cities to tap the growing demand. Hyderabad, Delhi NCR, and Pune witnessed maximum growth in launches during the nine-month period ended September when compared to other cities.

Unsold inventory remains stable 

City

Q2 2021

(in units)

Q3 2021

(in units)

Growth (%) – Q3 2021 over Q2 2021

Aggregate (7 cities)

477,106

477,576

0.1%

Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, and Kolkata Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Data includes only apartments, Row houses, Villas and Plotted developments are excluded from our analysis

Source: Real Estate Intelligence Service (REIS), JLL Research

Unsold inventory in Q3 2021 remained almost stable when compared to Q2 2021 as demand and supply dynamics remained steady. An assessment of years to sell (YTS) reveals that the expected time to liquidate this stock has increased marginally from 5.2 years in Q2 2021 to 5.3 years in Q3 2021. Sales of residential units has been on an upward trajectory and is projected to gain further momentum as the impact of the second wave wanes. Consequently, the market is expected to gain with YTS likely to decline over the short to medium term.

Prices expected to remain range-bound

Residential prices in a majority of India’s residential markets have remained stagnant in the past few years. In Q3 2021, prices remained largely stagnant when compared to the previous quarter, across all the seven markets under review. With the festive seasons around the corner, developers are now offering various discounts such as straight-up price discounts, deferred payment plans and other incentives like no pre-EMIs for under-construction properties, waiver of floor rise & car parking charges, free home furnishings, attractive gifts and so on to attract fence-sitters and prospective home buyers. With the residential prices holding steady along with various incentives offered by developers, the residential market is likely to witness an upward trajectory.

Corporate Comm India (CCI Newswire)