Primary sales to witness a decline of 40-50% in top 10 cities in 2020: CRISIL

NEW DELHI: CRISIL Research estimates overall primary sales to witness a decline of 40-50% in top 10 cities in 2020. Developers in southern India have performed better than the rest of the country as these have a larger share of branded developers.

The decline in the fiscal first half for the top seven listed developers has been in the range of 10-20% compared with a decline of 50-60% in top 10 cities, indicating a shift towards key developers. This trend was visible before the pandemic struck and is estimated to continue over the second half, said Crisil.

New home sales have seen a surprise surge in the last couple of months, making the pandemic-led disruption look like a mere blip. Units sold in Mumbai and the rest of Maharashtra are 1.1 – 1.3 times higher compared with January this year, said Crisil.

The spurt rides on supportive measures from governments of key states. Maharashtra, for instance, has reduced stamp duty from 5% to 2% up to December 2020 and to 3% for January-March 2021. Karnataka, too, has reduced stamp duty from 5% to 3% for properties priced between Rs 21 lakh and Rs 35 lakh.

A favourable, buyer-centric market has created an opportunity for first-time homebuyers and fence-sitters as well as resale flat buyers. Renewed interest of non-resident Indians in sales is also being observed.

With ‘ready to move’ inventory constituting 10-20% of the total inventory in key cities and upcoming supply this fiscal at similar levels, capital values are likely to remain under pressure at least for the rest of this fiscal.

That said, while the overall rebound in real estate demand in October was faster than envisaged earlier, its sustenance post the festive season will be a monitorable, observed Crisil.