New Delhi, Nov 19 (IANS) Although demand for residential properties have recovered in the past couple of months to pre-pandemic levels, the overall primary sales is likely to fall 40-50 per cent in the top 10 cities during the current financial year, according to a Crisil report.
The report noted that, while the overall rebound in real estate demand in October was faster than envisaged earlier, its sustenance post the festive season will be a “monitorable”.
“On full-year basis, we estimate overall primary sales to witness a decline of 40-50 per cent in top 10 cities. With ‘ready to move’ inventory constituting 10-20 per cent of the total inventory in key cities and upcoming supply this fiscal at similar levels, capital values are likely to remain under pressure at least for the rest of this fiscal,” it said.
The decline in the first half of th current fiscal for the top 7 listed developers has been in the range of 10-20 per cent compared with a decline of 50-60 per cent in top 10 cities, indicating a shift towards key developers.
This trend was visible before the pandemic struck and is estimated to continue over the second half, it said.
“New home sales have seen a surprise surge in the last couple of months, making the pandemic-led disruption look like a mere blip. Indeed, units sold in Mumbai and the rest of Maharashtra are 1.1-1.3 times higher compared with January this year,” it said.
The spurt rides on supportive measures from governments of key states. Maharashtra has reduced stamp duty from 5 per cent to 2 per cent up to December 2020 and to 3 per cent for January-March 2021.
Karnataka, too, has reduced stamp duty from 5 per cent to 3 per cent for properties priced between Rs 21 lakh and Rs 35 lakh.
Affordability across India’s top-10 cities has improved by up to 35 per cent over the past five years, given favourable interest rates and reduction in property prices. In addition, reduction in stamp duty has supported affordability improvement this fiscal.
Among major cities, affordability improvement in MMR, NCR and Pune is higher than in comparable metros such as Bengaluru and Hyderabad because of pricing pressure.
“A favourable, buyer-centric market has created an opportunity for first-time homebuyers and fence-sitters as well as resale flat buyers. Renewed interest of non-resident Indians in sales is also being observed,” the report said.
Quarterly results of key listed players indicate that the fiscal second quarter saw better-than-envisaged growth. And in most cases, bookings for these players touched pre-Covid levels. The momentum is expected to continue in the second half of this fiscal.