After months of slowdown, the residential real estate sector seems to be showing signs of recovery. Sales during the quarter ended September 2020 surged almost 85 per cent quarter-on-quarter.
One reason for the surge was a low base effect as sales had dipped during Q2 2020 (April-June) due to the pandemic. It was also due to a pent-up demand built up during prolonged lockdown across the country.
Despite this surge, sales have not returned to the pre-lockdown levels as it had declined 57 per cent compared to the same period last year.
According to Real Insight Q3 2020, a quarterly analysis of India’s eight prime residential markets by online real estate brokerage firm PropTiger.com, residential home sales aggregated 35,132 units during Q3. It was an 85 per cent increase over the previous quarter. Housing units in the sub-Rs 45 lakh price bracket, categorised as the affordable housing segment under income tax laws in India, made the biggest contribution to sales during the quarter. Its contribution was 45 per cent to the overall sales numbers.
“New supply grew almost 60 per cent on a quarter-over-quarter basis with 43 per cent of the 19,865 units launched coming in through the affordable housing segment. However, on a year-over-year basis, launches showed a significant downward trend declining by 66 per cent,” the report said.
“Green shoots are visible pointing to start of a recovery in residential real estate, evidenced by improvement in new launches and sales on a quarter-over-quarter basis. These are unprecedented times, which have made buyers aware of the important role that homes play in ensuring their well-being as well as their physical and emotional security,” said Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com and Makaan.com. “This, together with the fact that real estate is a hard asset, and the fact that home loan rates are near a 15-year low, have encouraged buyers to return to the market,”
“Consumers continue to perceive real-estate as a stable asset and a number of them are looking to upgrade their homes as working from home is likely to continue,” he added.