At last green shoots are emerging in residential real estate sector if the volumes in the second quarter of FY21 are any indication. What makes the industry even more optimistic is the fact that it’s happening just before the festive season. As we head into the festive season, some of the leading developers have lined up new launches and continue to focus on monetisation of ready inventory.
According to available information, Q2FY21 (July-September 2020) has seen industry volumes revive to 80% of pre-COVID levels owing to a mix of pent-up demand, price discounts and low mortgage rates. Also, in Maharashtra, lowered stamp duty rates are an added attraction for the home buyers.
However, overall industry is still not out of woods yet and volumes may remain lower in H2FY21 on YoY basis for the industry as a whole. It’s believed that leading and well-established players would return to normalcy much earlier than rest of the lot. Marginal players who are unable to sustain for longer period may become easy prey for larger players.
According to PropEquity, residential sales volumes in Q2FY21 (July-September 2020 period) across India’s top 8 cities have bounced back to 80% of pre-COVID levels. Overall sales in terms of units improved to 55,000 units which is up two times quarter on quarter basis. Even more heart-warming news is the fact that the QoQ rise in absorption was accompanied by a rise in new launches which grew 116% QoQ to 39,300 units as lockdowns were relaxed across cities.
With developers continuing to offer discounts of 5-10%, low mortgage rates of 7-8% and pent-up demand along with Work from Home driving need for houses, large and organised developers have been able to effectively drive sales through digital channels by leveraging their brand strength even in a weak market.