The novel coronavirus (Covid-19) outbreak has further aggravated the stress in the beleaguered real estate sector, with apartment sales declining 42% year-on-year and 24% on a quarterly basis so far in the January-March 2020 quarter. Sales are largely concentrated in big cities like Delhi, Mumbai, Bengaluru and Pune.
According to Anarock Property Consultants, during Q1 of 2020, residential sales in the top seven cities stood at 45,200 units, against 78,510 units a year ago and 59,170 units sold in October-December 2019. Commenting on the scenario, Anarock chairman Anuj Puri said, “Given the ongoing global healthcare calamity, it’s no surprise that housing sales and new project launches across India’s top seven cities decreased both on yearly and quarterly basis. As expected, monthly data trends reveal that March — the month when most advisories and lockdown were imposed — saw a steep decline in both new launches and housing sales against the preceding two months.”
The government has taken a necessary hardline stance to curtail the spread of the virus. The lockdowns have stalled construction activity and will lead to project delays in the future, but this is a reality the sector must accept and live with, he added.
“Perhaps the only silver lining is that developers were able to shed nearly 3% of their unsold inventory in a year — from 6.65 lakh units in Q1 2019 to over 6.44 lakh units in Q1 2020. On a quarterly basis, the decline was just 1%,” Puri noted.
In terms of apartment sales, Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru and Pune together accounted for 84% of the sales in the first quarter of the current calendar year. Kolkata recorded a significant drop in sales in this quarter as compared to the other top cities with a 25% quarter-on-quarter drop from 3,260 units in Q4 2019 to 2,440 units in Q1 2020. On an annual basis, sales contracted by 39%.
MMR and Delhi-NCR too witnessed a significant decline in sales in the current quarter compared to the other top cities. Sales in both regions decreased by 24% Q-0-Q, clocking in at 8,150 and 13,910 units respectively. Year-on-year, housing sales in MMR fell 42% and by 41% in NCR.
Sales in Bengaluru, Pune and Hyderabad decreased by 23% each over the previous quarter, with around 8,630 units, 7,200 units, and 2,680 units, respectively. On a yearly basis, the decline in the three major IT hubs stood at 45%, 42% and 50%, respectively.
Chennai saw sales of around 2,190 units, which is a decline of 21% over Q4 2019 and by 36% annually (since Q1 2019). With new supply and housing sales remaining subdued in the Q1 2020 quarter, unsold inventory saw a marginal decline of 1% on a quarterly basis from 6.48 lakh units in Q4 2019 to 6.44 lakh units by Q1 2020, and 3% y-o-y from 6.65 lakh units in Q1 2019 to 6.44 lakh units by Q1 2020. Residential property prices across the top cities remained stagnant in Q1 of 2020 over the previous quarter. On an annual basis too there was no price movement.
(Source: Financial Express)
