TheNFAPost Podcast

Chennai, NFAPost: Despite the spiralling COVID-19 pressures across the country, the Indian housing sector made a decisive comeback in Q3 2020 with sales and new launches rebounding to 65% and 79% of the pre-COVID-19 levels (Q1 2020) respectively.

Approximately 1,600 units sold in Chennai in Q3 2020 against 2,190 units in Q1 2020, rebounding to 73% of Q1 2020 levels.

The top 7 cities witnessed housing sales of approximately 29,520 units in Q3 2020 as against 45,200 units in the pre-COVID-19 quarter of Q1 2020. Sales were significantly higher than the preceding quarter, when the coronavirus pandemic had brought sales down to just 12,730 units.

ANAROCK Property Consultants Chairman Anuj Puri said, “MMR, Bengaluru, NCR and Pune altogether accounted for 84% sales in the July-Sept quarter. MMR saw maximum sales of 9,200 units, followed by Bengaluru with 5,400 units, NCR with 5,200 units and Pune with 4,850 units.”

“In terms of new launches, the top 7 cities witnessed supply of approximately 32,530 units in Q3 2020 as against 41,220 units in Q1 2020 – reaching over 79% of the pre-COVID-19 quarter levels. Cities like Hyderabad, Kolkata and NCR saw new supply increase during the quarter as against the first quarter of 2020. Most new launches in the quarter happened virtually,” he added.

Interestingly, Hyderabad, Kolkata and NCR saw their new supply increase by 45%, 24% and 10% respectively during the period. The affordable and mid segments (priced up to Rs 80 Lakh) comprised over 72% share (approximately 23,290 units) of the total new supply between July-September.

Unsold inventory in the top cities shrunk by approximately 3% on a yearly basis – from 6.56 lakh units back in Q3 2019 to 6.36 lakh units in Q3 2020. It reduced by 1% between Q1 2020 and Q3 2020.

Thus, despite the inexorable rise of COVID-19 cases, periodic local lockdowns across states and the traditionally inauspicious ‘shradh’ period, residential sales and new launches saw reasonable momentum in Q3 2020. On a q-o-q basis, the jump has been massive for both new launches and sales; the Apr-Jun quarter was more of an outlier with most activity at a standstill.

Currently, reduced stamp duty charges in Maharashtra coupled with developers’ incentives and rock-bottom home loan interest rates are a major attraction for homebuyers. This indicates that the upcoming festive season quarter (Oct-Dec) may see housing sales recover to almost the pre-COVID-19 levels.

Q3 2020 New Launch Overview:

Key cities contributing to Q3 2020 new unit launches included MMR, NCR, Bengaluru, and Hyderabad, altogether accounting for 78% addition.

  • MMR saw about 7,890 units launched in Q3 2020 as against 10,490 units in Q1 2020 – reaching nearly 75% of the pre-COVID-19 quarter. Over 53% of the new supply in this quarter was added in the sub Rs 80 lakh budget segment, while 28% new supply was added between Rs 80 lakh and Rs 1.5 Cr budget segment.
  • NCR added nearly 6,810 units in Q3 2020 against 6,190 units in Q1 2020 – an increase of 10%. Over 76% of the new supply was added in sub Rs 80 lakh budget segment.
  • Bengaluru added new supply of 5,840 units in Q3 2020 as compared to 8,600 units in Q1 2020 – thus touching 68% of the pre-pandemic quarter.
  • Hyderabad added 4,900 units in Q3 2020, a significant increase of 45% over Q1 2020. Approximately 88% new supply was added in sub Rs 80 lakh price bracket.
  • Pune new launches rebounded to 54% of the pre-COVID-19 quarter with 4,200 units being launched in Q3 2020.
  • Chennai added 1,560 units in Q3 2020 as against 3,680 units in Q1 2020 – reaching back at 42% of the pre-pandemic quarter.
  • Kolkata added 1,350 units in Q3 2020 as against 1,090 units, an increase of 24% over Q1 2020.

Q3 2020 Overall Sales Overview:

Approximately 29,520 units were sold in Q3 2020 – rebounding back to 65% of pre-COVID-19 quarter (Q1 2020).  NCR, MMR, Bengaluru, and Pune together accounted for 84% of the sales in the quarter. Interestingly, in comparison to the preceding quarter, sales have increased by over 132% in the top cities.

  • MMR saw nearly 9,200 units sold in Q3 2020 as against 13,910 units in Q1 2020 – sales effectively come back to 66% of the pre-pandemic quarter.
  • Bengaluru recorded 5,400 units sold in Q3 2020 against 8,630 units in Q1 2020 – regaining 63% of business.
  • NCR witnessed sales of 5,200 units in Q3 2020 against 8,150 units in in Q1 2020 – 64% of the Q1 2020 levels.
  • Pune saw 4,850 units sold in Q3 2020 as against 7,200 units in Q1 2020 – back at 67% of pre-pandemic levels.
  • Hyderabad saw 1,650 units sold in Q3 2020 as compared to 2,680 units in Q1 2020 – sales are back at 62% of Q1 2020 levels.
  • Kolkata saw housing sales of 1,620 units in Q3 2020 and 2,440 units in Q1 2020 quarter – recovering to 66% of Q1 2020 levels
  • Chennai saw housing sales of 1,600 units in Q3 2020 against 2,190 units in Q1 2020, rebounding to 73% of Q1 2020 levels
City-wise Housing Sales & New Launches
Cities Name Housing Sales in Q3 2020 (Units)New Launches in Q3 2020 (Units)
NCR5,2006,810
MMR9,2007,890
Bengaluru5,4005,840
Pune4,8504,180
Hyderabad1,6504,900
Chennai1,6001,560
Kolkata1,6201,350
Total29,52032,530

Source: ANAROCK Research

Overall unsold inventory till Q3 2020

Unsold inventory decreased by approximately 1% – from 6.44 lakh units in Q1 2020 to 6.36 lakh units by Q3 2020 and 3% on yearly basis – it was 6.56 lakh units in Q3 2019. On yearly basis, Bengaluru saw the maximum reduction of 3% in its unsold stock – from nearly 62,800 units in Q3 2019 to approximately 60,820 units in Q3 2020.

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