NE BUSINESS BUREAU
AHMEDABAD, OCT 8
The average housing prices declined by 3 percent while that of office rentals went down by 5 percent during July-September or the second quarter of FY21 due to pandemic, says a survey.
The average housing prices declined by 2-7 per cent year-on-year during July-September in Delhi-NCR, Mumbai, Chennai, Pune, Kolkata, and Ahmedabad on lower demand amid COVID-19 pandemic, according to Knight Frank India.
According to Knight Frank India’s special report – India Real Estate Update (July – September 2020) – which analyses the residential and office market performances across eight major cities for the Q3 2020period. The report estimates that home sales volume jumped by 2.5 times to 33,403 units in Q3 2020 compared to 9,632 in Q2 2020. New residential unit launches increased by 4.5 times to 31,106 units in Q3 2020, compared to 5,584 units in the previous quarter.
Housing prices, however, increased in Bengaluru and Hyderabad by 3 per cent and 4 percent, respectively, during July-September 2020 compared with the year-ago period.
Chennai saw the maximum fall of 7 percent, followed by Delhi-NCR and Pune at 5 percent.
Rates dipped 3 per cent each in Kolkata and Ahmedabad, while Mumbai witnessed 2 percent price correction.
The weighted average prices in Q3 2020 registered a year–on–year (y-o-y) decline in six of the eight markets, the consultant said.
“Hyderabad and Bengaluru were the only markets that witnessed a price increment of 4 percent and 3 per cent y-o-y respectively, as developers in these pre-dominantly end-user markets sustained pricing power in a favourable demand-supply scenario,” Knight Frank India said in its report released on Thursday.
According to the report, housing sales stood at 33,403 units during July-September of this calendar year, which is 3.5 times higher than 9,632 units recorded in the previous quarter.
“There has been a meaningful improvement in sales and launches in Q3 2020. Developers have been focusing on liquidating inventory and homebuyers inclined to purchase ready assets has translated into reduced unsold inventory levels in this quarter,” Knight Frank India CMD Shishir Baijal said.
For markets such as Mumbai and Pune, he said the additional push by the state government in the form of reduced stamp duty has helped in demand generation.
“Going forward, the festival season will be crucial for developers. This may prove to be an opportune time for end-users with the adequate financial stability to make their investments. The near-term outlook on sales continues to depend on the speed and trajectory of recovery in the economy in the months ahead,” Baijal said.
Sales improved compared to the April-June period as developers offered financial benefits, discount and easy payment options to attract buyers. Lower home loan interest rate also supported pick-up in residential sales, the report said.
Builders adopted digital tools to engage with customers. The acute labour crunch experienced in the earlier part of the lockdown also started to ease out, as workers began to return to main cities seeking employment.
“Even while there is a considerable distance from normality, the residential sector has started to show signs of improvement in Q3 2020,” the consultant said.
The total office transactions of the eight markets in Q3 2020 have improved and reached 33% of the 2019 quarterly average level. Chennai, National Capital Region (NCR), and Mumbai recorded higher recovery in Q3 2020 with transactions reaching the level of 57%, 43%, and 42% respectively of the quarterly average of the year 2019. New completions also improved to 29% of the 2019 quarterly average. In terms of new completions in Q3 2020, Ahmedabad was the only market to report higher new office completions, 125% of quarterly average levels of the year 2019.
HOME SALES IN UNITS
| MARKET | 2019 QUARTERLY AVERAGE | Q1 2020 | Q2 2020 | Q3 2020 | Q3 2020 AS % OF 2019 QUARTER AVERAGE |
| Kolkata | 2,817 | 2,937 | – | 3,921 | 139% |
| Chennai | 4,240 | 2,981 | – | 3,085 | 73% |
| Pune | 8,202 | 7,813 | 2,235 | 4,918 | 60% |
| NCR | 10,707 | 5,446 | – | 6,147 | 57% |
| Mumbai | 15,236 | 15,959 | 2,687 | 7,635 | 50% |
| Bengaluru | 12,019 | 8,693 | 3,484 | 4,912 | 41% |
| Hyderabad | 4,067 | 3,808 | 974 | 1,609 | 40% |
| Ahmedabad | 4,181 | 2,268 | 252 | 1,176 | 28% |
| Total | 61,467 | 49,905 | 9,632 | 33,403 | 54% |
Source: Knight Frank Research
HOME LAUNCHES IN UNITS
| MARKET | 2019 QUARTERLY AVERAGE | Q1 2020 | Q2 2020 | Q3 2020 | Q3 2020 AS % OF 2019 QUARTER AVERAGE |
| Kolkata | 1,414 | 858 | – | 1,934 | 137% |
| Chennai | 2,886 | 3,520 | – | 2,547 | 88% |
| NCR | 5,726 | 1,422 | – | 4,110 | 72% |
| Pune | 11,165 | 12,650 | 785 | 6,721 | 60% |
| Bengaluru | 8,443 | 8,963 | 1,843 | 4,720 | 56% |
| Ahmedabad | 2,872 | 2,102 | 525 | 1,451 | 51% |
| Mumbai | 19,953 | 22,388 | 1,011 | 8,389 | 42% |
| Hyderabad | 3,374 | 3,002 | 1,420 | 1,234 | 37% |
| Total | 55,831 | 54,905 | 5,584 | 31,106 | 56% |
Source: Knight Frank Research
OFFICE NEW COMPLETIONS (IN MN SQ M)
| Market | 2019 quarterly average | Q1 2020 | Q2 2020 | Q3 2020 | Q3 2020 as % of 2019 Quarter average |
| Ahmedabad | 0.11 | 0.24 | – | 0.14 | 125% |
| Bengaluru | 0.37 | 0.37 | – | 0.10 | 27% |
| NCR | 0.29 | 0.03 | 0.04 | 0.06 | 20% |
| Mumbai | 0.18 | 0.24 | 0.10 | 0.03 | 15% |
| Chennai | 0.04 | 0.30 | – | 0.01 | 15% |
| Pune | 0.10 | 0.02 | – | – | 0% |
| Hyderabad | 0.25 | 0.25 | – | – | 0% |
| Kolkata | 0.14 | 0.01 | – | – | 0% |
| Total | 1.13 | 1.46 | 0.15 | 0.33 | 29% |
Source: Knight Frank Research
OFFICE: AVERAGE YOY RENT GROWTH ACROSS MARKETS DURING Q3 2020
| Market | Rent Growth YoY |
| Bengaluru | 4% |
| Hyderabad | 2% |
| Chennai | 0.5% |
| Pune | 0% |
| Mumbai | -1% |
| Ahmedabad | -5% |
| NCR | -5% |
| Kolkata | -6% |
Source: knight Frank Research
