Record residential sales momentum in Q4 helps cushion dip in 2020 performance | Economic Times

MUMBAI: While the ongoing Covid19 pandemic has delivered a hard blow to the residential real estate, last quarter of the chaotic year has helped in softening the impact with gradual improvement in the sales momentum.Although residential real estate bottomed out in 2020 against the previous peak of 2014, the October-December quarter has provided strong revival signs with home affordability being at its all-time best.Top seven property markets across the country have seen total home sales of over 1.38 lakh units in 2020, on-year decline of 47%. However, amidst varied offers and discounts, these top 7 cities saw robust sales of around 50,900 units in the fourth quarter, rebounding to 86% of the activity seen in the corresponding period in 2019, showed data from Anarock Property Consultants.“2020 has been an unprecedented year due to COVID-19, causing all-round upheaval… However, the residential segment was quick to pick up momentum in the last two quarters of 2020 on the back of growing homeownership sentiment catalysed by the exigencies of the pandemic. This pent-up demand was further accelerated by the ongoing discounts and offers, the prevailing lowest-best home loan interest rates and limited-period stamp duty cuts in states such as Maharashtra,” said Anuj Puri, Chairman – ANAROCK Property Consultants.Mumbai Metropolitan Region (MMR) and Pune drove residential sales, with these two cities accounting for over 53% total share.Record-low home loan rates, price correction, government’s tax incentives and stamp duty reduction in states like Maharashtra and Karnataka have enabled the current quarter to cushion the decline in annual sales activity.For instance, the country’s biggest real estate market of Mumbai has continued its record-setting ride in December as homebuyers rush to conclude deals to take advantage of these factors that have converted the market in buyers’ favour. The performance in December has already broken all the monthly records in just the first half of the month and is expected to close with the highest numbers ever.“Most of the variables seem to have fallen in place. Genuine homebuyers who have been waiting on the side-lines have started to take decisions. Buyers’ sentiment has seen an upturn led by record-low home loan rates and various other enabling steps taken by the central and state government. We expect the momentum to continue,” said Deepak Goradia, Managing Director, Dosti Realty.Registration of residential sales in the financial capital rose 53% from a year earlier to 9,827 deals in the first just 18 days of December, surpassing the number for the entire November month, which itself was the highest in eight years. These numbers are 66% higher than the pre-pandemic month of February.According to property brokers, the uptrend in housing sales is visible across all the key markets as the pandemic has made them realise the need for a bigger home. While initially the preference was for ready properties, now the under-construction projects are also witnessing good traction.Due to increased new launches across cities, unsold inventory declined by 2% on a yearly basis to 6.38 lakh units during the fourth quarter. However, in comparison to the peak levels of 2016, when unsold stock stood maximum at around 7.91 lakh units in top markets, it has seen a significant 19% decline.A sharp dip in housing supply also helped in avoiding further pile up of unsold inventory and easing the levels. New housing supply in 2020 declined by 46% against the preceding year to 1.28 lakh units.On the supply front, the top cities saw a 2% rise in launches at 52,820 units during the fourth quarter against 51,850 units. Hyderabad outpaced other cities and added a massive new 12,820 units supply in the quarter, followed by Mumbai Metropolitan Region with over 11,910 new units.