Magicbricks PropIndex Points Out That The Demand For Residential Real Estate In Q3 Has Exceeded Pre-COVID Levels By 30-40%

Notwithstanding the uncertainty in India’s economy due to the impact of COVID-19, the real estate industry has witnessed a growth recovery in demand as property searches increased by 30-40% as compared to pre-Covid levels, showed property portal Magicbricks’ PropIndex for the quarter ended September.

The previous edition of the Propindex Report for Apr-Jun (Q2) 2020 had reported that the consumer searches reached pre-COVID levels in June, after falling by as much as 50% during April. The consumer search pattern holds the same trend since then and as of September end the consumer searches were almost 30-40% higher than the pre-COVID levels.

The consumer preference has predominantly shifted towards affordable and mid-segment properties.

“With the festive season just around the corner, we are witnessing a sharp recovery in demand and prices have remained stable for the July-September quarter after falling upto 5% in the April-June quarter of 2020. This augurs well for the industry and we hope consumers’ buying sentiment will continue to improve and translate into transactions in the coming quarters,” said Sudhir Pai, CEO, Magicbricks.

According to him, the next 6-8 months are crucial for the revival of the residential sector. The onset of the pandemic and the ensuing lockdown have changed consumer preferences and the shift is towards affordability as home buyers have reduced their budget but they haven’t changed their preference in terms of apartment size.

The PropIndex report suggests that primary concerns of liquidity crunch and subdued level of transactions have become acute during the pandemic, but the lockdown has also thrown open a plethora of opportunities and interesting buyer trends.In line with the overall economic sentiment, the consumers have reduced their budgets in most cities but they are not compromising on the size of the house and moving towards peripheral locations.

This trend is an indication of working professionals’ newly emerging need for additional rooms in homes with the altered lifestyle of having to work-from home. However, it is too early to say, if such trends would sustain in the long-term and how developers leverage the changing buyer preferences.

On a regional-level, the southern market of Hyderabad has slightly recovered posting a 2% price increment during the quarter after witnessing a dip of 5.2% in the previous quarter. The real estate prices of Mumbai Metropolitan Region (MMR) and the NCR region including Gurugram and Noida, posted a marginal increase in prices.

Measures taken up by the government such as extension of RERA deadlines, reduction in stamp duty and liquidity infusion in stressed projects through the SWAMIH fund are expected to boost confidence of home buyers and also help developers. Resurgent demand and stable prices indicate that for now the residential sector has managed to stay off the panic mode and with an expected early arrival of the vaccine for Covid19, it should let the sector take its normal trajectory.

Of the key cities, Bengaluru is on the path to recovery as searches for property grew by 47% in September quarter after witnessing a fall of 14% in June quarter owing to the lockdown. Price decline was recorded to be only 0.5% during the quarter post the un-lockdown process. Focus has shifted to affordable neighborhoods in the periphery, even as mid segment continues to drive maximum traction for home buyers.

Chennai depicted a modest recovery, with a greater focus on affordable housing, property searches increased by 35% in the region. Magicbricks data suggests that ready-to-move properties witnessed a marginal dip in prices of 0.6% sequentially and 0.3% on-year.

In Hyderabad, independent houses and plots market fully recovered in search volumes as compared to pre-Covid levels. Prices in the residential market that previously witnessed a 5.2% decline in Q2, now observed a 1.9% sequential increase in September quarter.

In Delhi, property demand witnessed a turnaround with more searches near the employment hubs. The city witnessed an increment of 36% in the searches in September quarter, as compared to 11% sequential decline in June quarter. While the demand increased for residential properties, prices fell 0.5% during the quarter.

However, it will be interesting to see the new trends emerging in the markets. With affordable housing segments and ready-to-move properties as the key focus for buyers, peripheral regions near employment hubs are picking up pace.

(Source: Economic Times)