Real estate sales in India declined over 75 percent in the quarter ended June as against the previous quarter while the period saw the lowest number of new launches since 2013, suggests a report by 99acres.com.
"New project launches remained nil during the quarter and progress on ongoing projects suffered on account of reverse migration of labourers and disruptions in the supply chain. Property owners unwilling to sell at a reduced price exited from the secondary market. Unsold inventory stood at 6 lakh units at the end of Apr-Jun 2020," the report reads.
While residential enquiries gradually increased to about 50 percent of the pre-COVID-19 times at the end of June 2020, sales remained low key.
Zooming into the country's financial capital Mumbai witnessed a drop of 70 percent in sales of residential houses during the April-June 2020 period. Developers struggling for sustenance abstained from announcing new projects and focused on disposing of their existing residential units.
"Barring a few project launches by Grade A developers, including Lodha Developers, Godrej Housing, Hiranandani Group, Runwal Group and L&T Realty, the majority of builders deferred their expansion plans. Technology disruption took the industry by storm," the report said.
“Apr-Jun 2020 witnessed several developers undergoing digital transformation and virtual project launches and e-site visits providing some relief from the COVID-19-induced crisis. After some setbacks, 99acres traffic and responses returned to pre-COVID levels by the end of June 2020," said Maneesh Upadhyaya, Chief Business Officer, 99acres.com.
The survey revealed that 75 percent of its registered buyers now prefer shortlisting or buying a property through real estate portals. Further, 60 percent of the participants averred that they would prefer undertaking a virtual tour before physically visiting the project site, he added.
The double whammy of NBFCs liquidity crisis and COVID-19 forced the developers to adopt a cautious stance towards new launches.
Limited enquiries, sluggish sales and dwindling launches outlined the residential market of Mumbai in Apr-Jun 2020. Despite some developers offering discounts, the conversion rate in the city slowed down, QoQ, the report said.
Price Movement in Key Micro-Markets
The residential market in Navi Mumbai gradually gained momentum in Q1 2020-21. While April remained dented with negligible sales, May and June witnessed a slow rebound. Close to 300 new units were sold during the quarter, according to the report.
The average capital prices in Mumbai reeled under pressure, and about 60 percent of the listed locales posted a downward trend in the ‘ask’ rates in Apr-Jun 2020.
The crisis posing threat to the financial stability of potential homebuyers altered their residential preferences.
"End users planning to buy 2 BHK units inclined towards 1 BHK configurations to cut down on their budget. Nearly 60 percent of the demand in Mulund, Dombivli, Powai, Boisar and Andheri was noted for 1 BHK units priced within Rs 70-80 lakh," the report said.
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