Home sales declines by 54% year-on-year due to Covid-19: Report

NEW DELHI: The home sales in top eight cities of India declined by a significant 54% year-on-year to a decadal low of 59,538 units during H1 2020 with sales mostly concentrated in the first quarter of calendar year, according to a recent report by Knight Frank India.

New home launches also reported a massive drop of 46% year-on-year to 60,489 units in the same period. The unprecedented disruptions caused by the on-going pandemic stalled the economy in Q2 2020.

The residential market in the National Capital Region (NCR) witnessed a decline of 73% year on year in the home sales to 5,446 units in H1 2020, the report said. The home launches in NCR saw an 82% year-on-year decline to 1,422 units, a record low in any half yearly period in a decade. The city also witnessed a 6% year-on-year decline in the weighted average prices to Rs 4,145 per sq ft.

Rajani Sinha, chief economist and national director (Research) Knight Frank India said, “While the quoted residential prices have fallen marginally, the effective price fall is in the range of 8-12% and even more in some cases, if we take into account the indirect discounts being offered. Another positive is that home loan rates are at a historical low, which will provide some support to the market as and when the economic situation normalises.”

In H1 2020, Gurugram reported the highest share in new launches in NCR, accounting to 58%. Due to the lockdown, no new launches were witnessed in Q2 2020. Of total sales volumes in H1 2020, the city accounted for a 27% share of the NCR market, the report added.

In H1 2020, Noida accounted for nearly one-third of NCR’s new supply with a 32% share of total launches. The new supply declined abruptly by 90% year-on-year over H1 2019. Due to an oversupply of residential units, no new projects were launched in Greater Noida.

The COVID – 19 outbreak adversely impacted the sales velocity in H1 2020. Both Greater Noida and Noida reported massive de-growth of 78% year-on-year and 66% year-on-year respectively.

Home sales in traditionally end-user markets like Bengaluru and Hyderabad also fell sharply by 57% and 43% year-on-year respectively during H1 2020.

Unsold inventory across the top eight markets dropped marginally in H1 2020, registering a 1% decline to 446,787 units.

In H1 2020, Mumbai had the highest quantum of unsold inventory at 150,154 units year-on-year, followed by NCR at 118,064 units year-on-year and Bengaluru at 77,043 units YoY, according to the report.