According to a report published by Knight Frank India, home sales volume across eight major cities in India jumped up by 2.5 times to 33,403 units during July to September (Q3) compared to 9,632 in the previous quarter. Also, new residential unit launches during Q3 increased by 4.5 times to 31,106 units as compared to 5,584 units in Q2, it said.
However, sharp jump in sales was accompanied by price decline in most of the markets. Weighted average prices registered a year-on-year decline of three to seven per cent in six of the eight markets. Hyderabad and Bengaluru were the only markets that witnessed a price increment of four and three per cent respectively as developers in these predominantly end-user markets sustained pricing power in a favourable demand-supply scenario.
According to Shishir Baijal, Chairman and Managing Director, Knight Frank India, homebuyers’ inclination towards ready-to-move-in assets and developers’ desperation to liquidate their inventory have contributed to the reduced unsold inventory levels in this quarter. Meanwhile, for markets such as Mumbai and Pune, the additional push by the state government in the form of reduced stamp duty has helped in demand generation and revenue creation for the state government. Going forward, the festival season will be crucial for developers.
On the other hand, gross office leasing across these cities witnessed a strong recovery, registering 80 per cent growth to 0.44 million square metres in Q3. Chennai, National Capital Region (NCR) and Mumbai recorded higher recovery with transactions reaching the level of 57 per cent, 43 per cent and 42 per cent respectively of the quarterly average of 2019.
New completions also improved to 29 per cent of the 2019 quarterly average. In terms of new completions in Q3, Ahmedabad was the only market to report higher new office completions with 125 per cent of quarterly average levels of 2019.
In terms of rental values, the recovery in office transactions and new completions helped rental values remain stable in Bengaluru (4 per cent) followed by Hyderabad (2 per cent), Chennai (0.5 per cent), and Pune with zero per cent year-on-year growth.