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New launches back at 2015 levels, sales sustain momentum in Q2 amid increased residential demand: PropTiger report

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Housing prices register an uptick in the backdrop of rise in input costs, geopolitical issues and reversal of accommodative stance by the central bank

 

National, 30th June 2022: As economic stability provides homebuyers with more confidence in their financial state, residential demand has picked up across the top eight cities, with both housing sales and new supply registering positive growth trend in the quarter ending April-June 2022 (Q2 CY2022).

According to Real Insight Residential – April-June 2022 report, a quarterly analysis of India’s top eight residential markets by REA backed PropTiger.com, the recent spike in property prices has had little impact on homebuyer sentiment as outlook towards overall economic scenario and income stability improve in the post-coronavirus pandemic phase.

The markets covered in the report include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region, and Pune.

“Even though the RBI increased the repo rate twice during the quarter to bring it to 4.90%, home loans remained largely affordable for the period analysed. The biggest booster to housing demand has been the increased importance of owning a property which has been further backed by the consumer confidence in the overall economic scenario and impending income stability,” said Mr. Vikas Wadhawan, Group CFO, Housing.com, PropTiger.comMakaan.com.

 

Ahmedabad, Hyderabad shows highest sales growth

According to the report, housing sales during the quarter ending June 30th, registered a sequential 5% uptick when compared to the previous quarter (Q1 CY2022). According to the report 74,330 units were sold across the top eight in Q22022 as compared to 70,620 units sold in Q12022. The sharpest sequential increase in sales was witnessed in end-user driven markets of Ahmedabad at 30% and Hyderabad, at 21%, respectively

Sales – Quarterly
City 2022 2021 QoQ YoY
Q2 2022 Q1 2022 Q2 2021
Ahmedabad 7,240  5,550 1,280 30% 465%
Bangalore 8,350  7,670 1,590 9% 425%
Chennai 3,220  3,300 710 -2% 354%
Delhi NCR 4,520  5,010 2,830 -10% 60%
Hyderabad 7,910  6,560 2,430 21% 226%
Kolkata 3,220  2,860 1,250 13% 157%
Mumbai 26,150  23,360 3,380 12% 673%
Pune 13,720  16,310 2,500 -16% 450%
India 74,330  70,620 15,970 5% 365%

Source: Real Insight Residential – April-June 2022, PropTiger Research 

 

 

New launches double in Kolkata

Growth in new supply   superseded sales numbers, registering a quarter-on-quarter growth of 28% with. 1,02,130 units launched in the second quarter as against 79,530 in the preceding quarter across India’s eight prime residential markets. New supply doubled in Kolkata on a quarterly basis, as per the report.

New Supply – Quarterly
City 2022 2021 QoQ YoY
Q2 2022 Q1 2022 Q2 2021
Ahmedabad 9,500 5,060 1,540 88% 516%
Bangalore 12,730 7,070 3,430 80% 272%
Chennai 1,830 1,630 490 12% 274%
Delhi NCR 2,970 4,270 820 -31% 262%
Hyderabad 16,480 14,570 8,810 13% 87%
Kolkata 2,010 990 1,010 103% 98%
Mumbai 43,220 30,360 2,930 42% 1377%
Pune 13,390 15,580 2,810 -14% 376%
India 1,02,130 79,530 21,840 28% 368%

*Units converted to nearest thousands

Source: Real Insight Residential – April-June 2022, PropTiger Research

 

Property values spike across cities

At the same time, average values of new and available properties in the top cities registered an upward price movement ranging between 5% to 9% in this period. Rise in input costs, inflationary pressures and premium attached with ready-to-move-in inventory.  The price rally for the analysis period was sharpest for Pune and Chennai, at 9% (YoY) each respectively.

Price in INR/sq. ft as of June’22
City Price INR/sq. ft as of June’22 YoY % growth
Ahmedabad 3,500-3,700 8%
Bangalore 5,700-5,900 7%
Chennai 5,700-5,900 9%
Delhi NCR 4,600-4,800 6%
Hyderabad 6,100-6,300 7%
Kolkata 4,400-4,600 5%
Mumbai 9,900-10,100 6%
Pune 5,400-5,600 9%
India 6,600 – 6,800 7%

*Weighted average prices as per new supply and inventory

Source: Real Insight Residential – April-June 2022, PropTiger Research

 

 

Inventory overhang at 34 months

The report highlights the current unsold stock in the country is at 7,63,650 units during this period, which will take approximately 34 months (2.8 years) to at the current sales velocity of the top eight cities.

Unsold Inventory as of June’22
City Unsold stock as of June’22 Inventory Overhang (months)
Ahmedabad 64,860 33
Bangalore 70,530 26
Chennai 32,670 27
Delhi NCR 99,850 65
Hyderabad 82,220 37
Kolkata 22,640 24
Mumbai 2,72,890 38
Pune 1,17,990 25
India 7,63,650 34

*Units converted to nearest thousands

Source: Real Insight Residential – April-June 2022, PropTiger Research

“We see developers returning to the market in full swing in the second quarter of the year, thus catapulting the new supply back to the 2015 levels. Looking at the overall encouraging trends, we anticipate the sustained demand momentum to increase strength to strength especially amid the upcoming festive season which will push the growth trajectory further in ensuing quarter,” said Ms. Ankita Sood, Head of Research, Housing.com, PropTiger.comMakaan.com

 

Note: The YoY growth in Q2 2022 is multi-fold due the low base as Q2 2021 was a bottomed quarter owing to the COVID-19 second wave. Hence, in this case it is better to compare sequentially to get the true picture of how the residential markets have performed in the 2nd quarter of 2022.

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