Residential sales surge by 47% yoy during Jan-Sept 2021: JLL

Residential sales during January-September 2021 increased by 47% as compared to the same period last year across the top seven cities, according to JLL’s Residential Market Update – Q3 2021, released today. This implies that the second wave had limited impact on sales in the first three quarters of 2021. On a sequential basis, sales improved by 65% during Q3 2021. Sales got a boost from many factors including lower Covid-19 cases in Q3 backed by robust vaccination drive which led to cautious unlocking of the economy in various states

Strong recovery in sales

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

“Developers have already started launching optimal sized apartments to capture changing consumer preference across most of the cities. Indian residential sector is expected to witness sustained growth in the coming quarters. The renewed buyer’s confidence has been instrumental in the recovery of the housing market in Q3 2021, which recorded good volume of sales and launches as compared to the same period last year and almost inching towards the pre-covid era. Sales of more than 32,300 residential units were recorded in Q3 2021 against 19,635 units in Q2 2021, a significant increase of 65% Q-o-Q,” said Siva Krishnan, Head - Residential, India, JLL

After a lull phase in Q2 2021 owing to the resurgence of the pandemic and restrictions imposed by various state governments, sales gained momentum during Q3 2021 as the country began to cautiously return to normal economic activities supported by aggressive vaccination drive. The growing need for home ownership supported by lower mortgage rates and stable employment scenario drove the housing demand in Q3 2021. Mumbai has consistently been the largest contributor to sales over the past five quarters. During Q3 2021, Mumbai and Delhi each accounted for 21% of the total sales followed Pune and Bengaluru. Recovery well underway as sales surpassed pre-covid levels

“Sales volume during the quarter surpassed the sale volume recorded in the pre-Covid period of Q1 2020 by 18%. At the same time, it is encouraging to note that the sales volume during the quarter is inching closer to the average quarterly volume of sales recorded in the pre-covid era of 2019, which stood at about 35,000 units. This certainly indicates that the market sentiments are improving compared to the previous year and bringing back buyer’s confidence in the market. Further reduction in home loan rates coupled with the festive season and improved market sentiments augurs well for the residential sector,” said Dr. Samantak Das, Chief Economist and Head Research & REIS, India, JLL

Second wave had limited impact on YTD sales

The cities were quick to bounce back from the impact bringing back buyer’s confidence into the market once the economy began to show signs of recovery and a growth trajectory for future. The increased momentum of the vaccination drive has further aided in limiting the impact of the second wave

The cities were quick to bounce back from the impact bringing back buyer’s confidence into the market once the economy began to show signs of recovery and a growth trajectory for future. The increased momentum of the vaccination drive has further aided in limiting the impact of the second wave

The top seven cities under consideration witnessed new launches of 32,863 units in Q3 2021, an increase of 21% Q-o-Q. As the economy began to improve and with the festive season around the corner, developers continued to launch residential projects across the country. Most of the new launches in the markets of Bengaluru, Mumbai and Pune were in affordable and mid segments.  Hyderabad continued to dominate new launches and accounted for about 29% of launches during Q3 2021. Pune and Mumbai, which contributed 23% and 19% respectively to the overall new launches followed. The markets of Kolkata, Delhi NCR and Pune witnessed a substantial increase in launch activities during Q3 2021, when compared to the same period last year as well as from the previous quarter. Development focus on mid and affordable segments continued in Q3 2021 with 77% of the new launches in the sub-INR 10 million category

New launches scale up

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Developers continue to be cautious towards launches

Although Q3 2021 witnessed healthy launches, new launches continued to remain below par when compared to pre-covid quarter of Q1 2020 (around 40,500 units) and the average quarterly launches witnessed in 2019 (around 34,000 units). Developers remain cautious in launching new projects as they are focused on off-loading their unsold inventory and recovering sales volume of the past few quarters. Developers are largely aligning their launch strategies in sync with actual market demand, thereby keeping the market fundamentals robust

Launches expanded by 38% YTD

The first three quarters of 2021 witnessed launch of 93,873 units registering a significant increase of 38% compared to the same period last year. Improving markets sentiments on the back of improved economic activities and the upcoming festive seasons have instilled confidence amongst developers as they strategically launch projects across cities to tap the growing demand. Hyderabad, Delhi NCR, and Pune witnessed maximum growth in launches during the nine-month period ended September when compared to other cities

Unsold inventory remains stable

Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, and Kolkata Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Data includes only apartments, Row houses, Villas and Plotted developments are excluded from our analysis

Source: Real Estate Intelligence Service (REIS), JLL Research

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