Home sales and launches accelerate as customer confidence recovers: JLL report

BENGALURU : Residential sales in the first six months, between January and September, increased 47% compared to the same period in 2020, in the top seven cities, according to JLL’s residential market update – Q3 2021.
On a sequential basis, sales improved 65% in the September quarter from the previous three months, due to a drop in covid-19 cases, a robust vaccination campaign that led to careful unlocking of the economy in various states.
“Developers have already started launching optimally sized apartments to capture changing consumer preferences in most cities. The Indian residential sector is expected to experience sustained growth in the coming quarters. Renewed buyer confidence contributed to the recovery of the housing market in the third quarter of 2021, which recorded a good volume of sales and launches compared to the same period last year and is almost approaching the pre- covid. Sales of over 32,300 residential units were recorded in the third quarter of 2021 compared to 19,635 units in the second quarter of 2021, a significant increase of 65% quarter-on-quarter, “said Siva Krishnan, manager – residential, India, JLL.
Mumbai has been the biggest contributor to sales over the past five quarters. In the September quarter, Mumbai and Delhi-NCR each accounted for 21% of total sales, followed by Pune and Bengaluru.
“The sales volume in the July-September quarter was 18% higher than the sales volume recorded during the pre-covid period of the first quarter of 2020. The sales volume during the quarter also moved closer to the volume. Average quarterly sales recorded in the pre-covid era of 2019, which stood at around 35,000 units. This indicates that market sentiment is improving from the previous year and is bringing buyers’ confidence back to the market, ”said Dr Samantak Das, Chief Economist and Research Officer and REIS, India, JLL.
The seven major cities surveyed recorded new launches of 32,863 units in the third quarter of 2021, an increase of 21% quarter-on-quarter. As the holiday season approaches, developers have also continued to launch residential projects across the country. Most of the launches in Bangalore, Mumbai and Pune were in the affordable and mid-range segments. Hyderabad continued to dominate launches and accounted for around 29% of launches in the third quarter of 2021. Pune and Mumbai contributed 23% and 19% respectively to total launches.
However, project launches remained below average compared to the pre-covid quarter of Q1 2020 (around 40,500 units) and the average quarterly launches seen in 2019 (around 34,000 units). Developers remain cautious in launching projects as they focus on selling their unsold inventory and recovering sales volume from recent quarters.
The unsold inventories in the third quarter of 2021 were broadly stable compared to the April to June quarter, with supply and demand dynamics remaining stable. A Sale Years Assessment (YTS) reveals that the expected time to liquidate this inventory has increased slightly from 5.2 years in the second quarter of 2021 to 5.3 years in the third quarter of 2021. Sale of residential units has followed an upward trajectory and should continue to progress. as the impact of the second wave decreases. Therefore, the market is expected to gain with YTS likely to decline in the short to medium term, JLL said.
Residential prices in most properties have remained stable over the past few years. From July to September also, prices remained largely stagnant compared to the previous quarter, in all the seven markets under review. As the holiday season approaches, developers are now offering various discounts such as direct price discounts, deferred payment plans and other incentives like no pre-EMI for properties under construction, exemption from floor elevation and parking fees, etc. to attract fence guards and potential buyers.

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