Q12021
Residential Market Viewpoints
PAN India
anarock.com
04New Launch Supply
06SalesTrend
07AvailableInventory
08AveragePrice
The year 2020 can be documented in the history of mankind as a Black Swan event that brought the entire world to a halt and the global economy being rendered inert. While India also faced the brunt of the unprecedented crisis created by the COVID-19 outbreak and the subsequent lockdown, the economy proved to be resilient due to a slew of reforms and stimulus packages announced by the government. The revival was quick as evident from the economic growth turning positive in a matter of few quarters.
The real estate sector, particularly the housing segment demonstrated exceptional suppleness as cities unlocked and the restrictions began to ease across the country. The year gone by was undoubtedly exemplary as it reduced real estate activities to its all-time low in the decade but within no time the sector sprang back into action charting a recovery. The segment had fathomed the bottom and has now begun to chart a new growth trajectory.
The continued trend of rising new launches during the current quarter stands testimony to the renewed demand and the confidence of developers who are optimistic about the future. The top 7 cities recorded an increase in launches in Q1 2021 to 62,130 units which is 18% more than the previous quarter and 51% more on y-o-y basis. Housing sales also bounced back to 58,290 units which is 15% more on quarterly basis and 29% in a year.
This stupendous recovery of the housing market in the country can be attributed to several factors that made the sector attractive. Bottomed-out property prices in most top cities including MMR following developer discounts have been instrumental in triggering demand.
2 | Residential Market Viewpoints PAN India Q1 2021
Reduced cost multiple of homeownership with rising income levels and declining home loan rates enabled buyers to settle for a hard asset. Stamp duty reduction in states like Maharashtra followed by Karnataka (for affordable housing) made the home buying propositions more lucrative. Sales registrations in Maharashtra in March 2021 were (approximately 12,700 units) 3.3 times the registrations in March 2020. The euphoria on the street is evident from the new records achieved by many developers clocking best-ever quarterly sales in the recent periods and a few major housing finance companies disbursing the highest volumes of loans.
The increasing presence of organized developers is re-instating homebuyer confidence. The share of sales by organized developers has already risen from 17% in FY’17 to 40% in Q3 FY’21.
The pandemic has altered the buyers’ preferences. Their predilections are for larger layouts with higher safety, hygiene, and captive amenities to ensure safe distancing yet secure an apartment that compliments their lifestyle.
The housing demand is likely to become stronger over the period, but the pace may slow down as the stimuli of the low-interest rates and stamp duty cuts will soon come to an end. These measures may not be eternal and will either be revised or revoked in the future which will impact the housing demand temporarily. However, in the short term, markets are likely to be active and it looks almost certain that the housing demand will continue to remain upbeat.
ForewordA New Decade - A New Beginning
ANUJ PURI
Founder & ChairmanANAROCK Group
NEW LAUNCH SUPPLY TREND
Launches across the top 7 cities continued to gain momentum during the first quarter of 2021. All cities, except Hyderabad exceeded their volumes compared to the last quarter as the housing demand improved with the after-effects of COVID outbreak now receding amidst ongoing vaccination drive.
Major cities such as MMR, NCR, Pune and Bengaluru recorded over 20% rise in launches compared to the previous quarter.
The mid-end segment dominated the launches and accounted for nearly 43% of the total supply. The affordable segment made a comeback in Q1 2021, accounting for nearly 30% compared to a share of 25% in the previous quarter.
Budget Segmentation:Affordable: < INR 40 LakhMid-end: INR 40 Lakh - INR 80 LakhHigh-end: INR 80 Lakh - INR 1.5 CrLuxury: INR 1.5 Cr - INR 2.5 CrUltra-luxury: > INR 2.5 Cr
62,130 18%Units Q-o-Q
SALES TREND
Sales across the top 7 cities increased by 15% compared to the previous quarter. The cities recorded growth in the range of 10% to 23%.
MMR and Pune accounted for more than 50% of the total sales in Q1 2021. The stamp duty waiver has been instrumental in furthering sales in these cities.
AVAILABLE INVENTORY
Supply exceeded the sales marginally in Q1 2021 as well as in the previous quarter as well, which resulted in the increase in available inventory.
Chennai recorded the lowest available inventory among the top 7 cities.
City New Launches Sold Units Available Inventory Avg. Price (INR/sf)NCR 6,750 8,790 168,360 4,650
MMR 14,820 20,350 197,040 10,750
Bengaluru 7,690 8,670 58,350 5,060
Pune 13,820 10,550 96,440 5,580
Hyderabad 12,620 4,400 44,980 4,240
Chennai 4,620 2,850 36,220 4,990
Kolkata 1,810 2,680 40,470 4,400
PAN India refers to Top 7 cities of India onlyAverage price in INR/sf as quoted on BSP on BUA
Key HighlightsQ1 2021 | PAN India
58,290 15%Units Q-o-Q
641,860 1%Units Q-o-Q
3 | Residential Market Viewpoints PAN India Q1 2021
TOP 7 CITIES
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
COVID-19 lockdown
Launches continued to rise across the top 7 cities in Q1 2021, recording an 18% increase from the previous quarter and 51% rise compared to the same period last year.
Most of the cities have recorded significant growth in launches in the range of 15% to 74%. MMR, Pune, and NCR together accounted for over 69% of the total launches.
Due to a surge in housing demand amidst the declining threat of COVID outbreak, the developers now have a better hold on the future and are looking to launch new projects.
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City Q1-21 Q4-20 Q1-20 Q-o-Q Y-o-YNCR 6,750 5,520 6,190 22% 9%
MMR 14,820 11,910 10,490 24% 41%
Bengaluru 7,690 6,400 8,600 20% -11%
Pune 13,820 11,200 7,790 23% 77%Hyderabad 12,620 12,820 3,380 -2% 273%Chennai 4,620 3,930 3,680 17% 26%
Kolkata 1,810 1,040 1,090 74% 66%
TOP 7 CITIES
All cities largely witnessed an increase in supply over the previous quarter. In fact, Pune attained a new peak since Q1 2019.
Hyderabad continued to record high volume of supply albeit marginally short compared to last quarter.
62,130Units
PUNE
HYDERABAD
New Launch Supply TrendPAN India
4 | Residential Market Viewpoints PAN India Q1 2021
TOP 7 CITIES – Q1 2021
Hyderabad and Pune accounted for nearly 89% of the supply in the mid-end and high-end segments in Q1 2021.
The gap between affordable and mid-end segment in Kolkata has narrowed down gradually over the last 3 years. The mid segment accounted for only 4% while affordable segment had a share of 89% in Q1 2018. Currently, the mid-segment accounts for 38% indicating the changing preference of buyers.
In NCR, the share of the luxury segment increased from 1% in the previous quarter to 14% in Q1 2021, indicating that this segment is back in action.
33%44% 42% 38%
44%34%
41% 41% 38%30% 25%
30%
41%31% 33% 40% 32%
32%
36% 32% 36%
25%
41%43%
43%
20% 15% 16% 13% 15%
20%
16%15% 17%
67%
19% 24% 19%
4%4% 5% 6% 5%
9%4%
8% 6% 8% 7% 5% 6%2% 6% 4% 3% 4% 5% 3% 4% 3% 3% 3% 2%
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
While the share of affordable housing increased to 30% in Q1 2021, the share of mid-segment remained largely stable from the previous quarter.
MMR, Pune and NCR contributed nearly 71% of the launches in affordable segment across the top 7 cities of India.
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Budget Segmentation:Affordable: < INR 40 LakhMid-end: INR 40 Lakh - INR 80 LakhHigh-end: INR 80 Lakh - INR 1.5 CrLuxury: INR 1.5 Cr - INR 2.5 CrUltra-luxury: > INR 2.5 Cr
21%
55%
5%
41%
29%
52%
38%
47%
22%
61%
38% 60%18%
28%
21%
18%
28%
21%9%
14% 20%
10%4% 3%
2%
14% 8%
1% 1% 2% 5%
Bengaluru Chennai Hyderabad Kolkata Pune NCR MMR
New Launch Supply Trend By Budget Segmentation
5 | Residential Market Viewpoints PAN India Q1 2021
3%
PUNE
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Sales TrendPAN India
City Q1-21 Q4-20 Q1-20 Q-o-Q Y-o-YNCR 8,790 7,760 8,150 13% 8%
MMR 20,350 17,600 13,910 16% 46%
Bengaluru 8,670 7,900 8,630 10% Nil
Pune 10,550 9,260 7,200 14% 47%
Hyderabad 4,400 3,570 2,680 23% 64%Chennai 2,850 2,460 2,190 16% 30%Kolkata 2,680 2,350 2,440 14% 10%
TOP 7 CITIES
All cities witnessed an increase in sales to the tune of 10% to 23%, over the previous quarter as the fear of the pandemic got allayed with the prospects of the vaccine ensuring restoration of employment and economic activities.
COVID-19 lockdown
58,290Units
Total sales in Q1 2021 increased by 15% on quarter and 29% on year.
Range-bound prices, improved affordability, employment stability, all-time low home loan rates along with the government stimulus of reduced stamp duty enabled sales.
Discounts/offers by developers to liquidate inventory also triggered sales across cities.
While previously buyers preferred only completed projects or those nearing completion to mitigate execution risk and project delays, we have noted a renewed interest in new launches during the quarter.
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MMR
6 | Residential Market Viewpoints PAN India Q1 2021
HYDERABAD
580,000
600,000
620,000
640,000
660,000
680,000
700,000
720,000
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Available Inventory TrendPAN India
City Q1-21 Q4-20 Q1-20 Q-o-Q Y-o-YNCR 168,360 170,400 173,120 -1% -3%
MMR 197,040 202,570 213,180 -3% -8%
Bengaluru 58,350 59,330 62,790 -2% -7%Pune 96,440 93,180 93,310 4% 3%Hyderabad 44,980 36,760 24,910 22% 81%Chennai 36,220 34,450 33,510 5% 8%
Kolkata 40,470 41,340 43,600 -2% -7%
TOP 7 CITIES
Hyderabad recorded a significant increase of 22% in available inventory due to high volume of launches during the current and the previous quarter.
Chennai continues to record the lowest available inventory across the major cities as of Q1 2021.
COVID-19 lockdown
641,860Units
Available inventory marginally increased by 1% compared to Q4 2020. This increase is primarily due to supply exceeding sales for two consecutive quarters. However, it is a good indicator of renewed confidence among the developers and brighter prospects for the future.
NCR, MMR, Bengaluru and Kolkata recorded marginal reduction in available inventory compared to the previous quarter.
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CHENNAI
7 | Residential Market Viewpoints PAN India Q1 2021
38%31%
23%
42%
11%
24%
61%
35%
22% 35%
39%
37%
41%
23%
15%
23%
28%
14%
40%
23%
11%7%
12%
8%
3%7% 7%
2%5%12%
6% 5% 5% 3%
NCR MMR Bengaluru Pune Hyderabad Chennai Kolkata
Available Inventory TrendBy Budget Segmentation
The affordable and the mid segments account for the highest share of available inventory across the cities.
Bengaluru recorded a reduction in available inventory despite significant launches in the mid segment during the quarter. This may be attributed to the need for extra spaces considering that the IT-ITeSprofessionals continue to work from home.
Kolkata has the highest available inventory in the affordable segment due to continued supply addition.
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Budget Segmentation:Affordable: < INR 40 LakhMid-end: INR 40 Lakh - INR 80 LakhHigh-end: INR 80 Lakh - INR 1.5 CrLuxury: INR 1.5 Cr - INR 2.5 CrUltra-luxury: > INR 2.5 Cr
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CAPITAL VALUES & INVENTORY OVERHANG
CityAvg. Base Selling
Price (INR/sf) Q-o-Q
(%)Y-o-Y
(%)Inventory
Overhang*Q-o-Q
Change*Y-o-Y
Change*NCR 4,650 2% 2% 85 -3 +35
MMR 10,750 1% 1% 47 -8 +11
Bengaluru 5,060 2% 2% 28 -1 +11
Pune 5,580 1% 1% 43 -5 +12
Hyderabad 4,240 1% 1% 53 1 +31
Chennai 4,990 1% 1% 59 -3 +21
Kolkata 4,400 Nil Nil 66 -4 +24
Prices increased marginally in Q1 2021 as the housing demand has witnessed a renewed interest. Also, the inputs costs have increased during the past few months. However, the developers continue to remain cautious to ensure continuity of sales.
Pan India inventory overhang decreased by 4 months during the quarter as majority of the cities witnessed an increase in sales.
*In months
8 | Residential Market Viewpoints PAN India Q1 2021
2%
NCR
MMR
Bengaluru
Pune
Hyderabad
Chennai
Kolkata
10
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4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0 10 20 30 40 50 60 70 80 90 100
Lau
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s (N
o. o
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nits
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Inventory Overhang (Months)
Inventory Overhang v/s New LaunchSupply v/s Available Inventory
9 | Residential Market Viewpoints PAN India Q1 2021
Bengaluru seems to be the healthiest market across the top 7 cities with low availability and an inventory overhang on less than 30 months.
Chennai with the least availability has an inventory overhang of nearly 5 years due to low sales volume.
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Note: Size of the circle representsavailable inventory as of Q1 2021
CHENNAIBENGALURU
As the prospects the country to get vaccinated becomes a reality, the fear of a second wave is gripping on us. It is true that the country and the economy has emerged resilient and stronger from the periods of lockdown experienced last year. However, if such a scenario is to be repeated, the government may take steps to stimulate the economy as assured. The massive vaccination drive undertaken may not result in the recurrence of such extreme situations.
The housing market across the major cities have recovered and scaling up once again from a bottom that was forced. The demand is renewed as evident from the upward trend of launches and sales. While the prices may continue an upward trend, the rise is expected be gradual. The stimulus offered in the form of low interest rates to keep the economy buoyant may continue for some more time till the inflation is manageable. Albeit it may not be sustainable for long.
The time bound measures of reduced stamp duty in Maharashtra and a few other states stimulated sales in the last quarter. However, as this comes to an end, there may be some sluggishness in the sales. New project launches may take a breather in the next quarter as there has been a significant addition in the last few quarters and the momentum is likely to regain during the festive season.
5 Key TakeawaysQ1 2021
10 | Residential Market Viewpoints PAN India Q1 2021
The regime of low interest rates may continue for some time and homebuyers may look to benefit from the same.
New designs and layouts of functional homes are likely to see light of the day in new projects that may be launched later during the year.
Prices are likely to revise upwards in the medium-to-long term.
Affordable and mid segment to remain in focus as buyers may remain price sensitive even though the certainty of employment may improve in the future.
The demand is going to be led by end-users with the emergence of new markets in the tier II & III cities.
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About ANAROCK
ANAROCK is India’s leading independent real estate services company with a presence across India and the Middle East. The Chairman, Mr. Anuj Puri, is a highly respected industry veteran and India’s most prominent real estate thought leader.
The Company has diversified interests across the real estate lifecycle and deploys its proprietary technology platform to accelerate marketing and sales. ANAROCK’s services include Residential Broking & Technology, Retail (in partnership with Vindico), Commercial, Investment Banking, Hospitality (via HVS ANAROCK), Land Services, Industrial and Logistics (in partnership with Binswanger), Investment Management, Research, Strategic Advisory & Valuations, Project Management Services (in partnership with Mace) and Apartment Management Services (acquisition of ApnaComplex).
The Company has a unique business model, which is an amalgamation of traditional product sales supported by a modern technology platform with automated analytical and reporting tools. This offers timely solutions to its clients, while delivering financially favourable and efficient results.
ANAROCK has a team of over 1800 certified and experienced real estate professionals who operate across all major Indian (Mumbai, Navi Mumbai, Pune, Ahmedabad, NCR – Delhi, Gurugram, Noida, Chennai, Bangalore, Hyderabad, Kolkata, Lucknow) and Middle East markets. ANAROCK has successfully completed over 400 exclusive residential project mandates. ANAROCK also manages over 80,000 established channel partners to ensure global business coverage.
Our assurance of consistent ethical dealing with clients and partners reflects our motto - ValuesOver Value.
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