29% surge for residential property sales in top seven cities

Despite the impact caused by the pandemic on the residential real estate market, it is slowly recovering. The discovery and supply of vaccination are expected to return the realty market to its pre-covid glory. With the emergence of the work from home trend, many realized the importance of owning a house. Thus the residential real estate sector in the top seven Indian cities has made a record comeback in the first quarter of 2021 at a rate of 29% residential property sales which is also breaching the pre-pandemic levels. 

Factors such as the record-low interest rates, the discounts offered by the developers, reduced stamp duty, and the property price are some of the key factors which contributed to the increasing demand for the residential real estate market. The increased rate of demand has also boosted the confidence of the developers and property owners as now they are all set to launch more projects which are also indicated through the rise in the number of new offerings in the market. 

Rising residential real estate demands in top cities

The improvement in the sales rate has been observed in all the top seven real estate markets in India. The sales of residential property have been recorded at a rate of 29% to 58,290 apartments in the first quarter of 2021. The robust performance in the increasing sales activities has been witnessed in cities such as Mumbai Metropolitan regions, Pune and Hyderabad. A leading real estate portal also stated that the number of new launches has also gone up in these cities between 51-62%. 

Source: ANAROCK

Several factors such as the reduced stamp duty, the reductions granted on the home loan interest rates discounts given by the builder, etc. are some of the factors that added incentives to the customers. The reduced stamp duty in the state of Maharashtra has led to Pune and Mumbai accounting for a 53% increase in the housing sales in the first quarter as around 8,670 units were sold. On the other hand, Bangalore has been the only market that could not record any major changes in the total sales number in the first quarter of 2021.  

Apart from the stamp duty reduction and low home loan interest rates, factors such as an improved liquidity rate and macroeconomic optimism have also aided the residential property market in India. Several Industrial experts, players, and investors believe it to be the right time to invest in real estate due to the real estate sector being more affordable and favorable in 2021. 

The main cities contributing largely to the new launches in the first quarter of 2021 includes Mumbai Metropolitan Region, Hyderabad, Pune and Bengaluru as it accounted for a supply at the rate of 79%. 43% of the new launches were recorded in the mid-housing segment and around 30% was recorded in the affordable housing units segment. A supply of 31% was also recorded in the category of luxurious housing units which cost above Rs. 1.5 crore. 

The average rise in the property year-on-year was recorded at a rate of 1-2% except in Kolkata wherein the price of the property remained stagnant and unchanged. Delhi and Bangalore recorded an increase in the price rate by around 2% in the last year. The number of unsold inventories was at a negligible rate as the new supply and launches outpaced the overall absorption rates. A high reduction has been witnessed in the number of yearly unsold inventories in the Mumbai Metropolitan Region which was followed by Bengaluru and Kolkata at a rate of 7% each. 

Bottom Line

Real estate investment and residential property has been one of the major investment options for Indians. Owning a home is a dream to many and people work hard towards it as well. The pandemic can be termed as a blessing and curse to this dream as well. In the early half of the outbreak, several individuals were in fear of losing their job which led them to be a little reluctant to purchase the property. Eventually, once the world got adjusted to the pandemic the fear subsided and people are once again looking forward to purchasing their dream homes. The government initiative of reducing stamp duty and builder’s initiative of grating discount on the property price has further made it more affordable and thus has made it the best time to invest. 

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