Housing Sales in Q2 – Here’s what you need to know as a Real Estate Investor

The second quarter of 2021 witnessed the surge of the 2nd wave of Covid-19. Analysts had anticipated weakness in most of the sectors including Real Estate due to various states imposing lockdowns. But, to catch everyone by surprise, India’s Real Estate Sector has done fairly well considering the market scenario. Comparing the 2020 and 2021 scenarios of Real Estate, the numbers have improved quite impressively. The Housing Sales Data presented by a leading real estate platform for the first half of 2021 shows a 93% increase in housing sales on a YoY basis in the top 7 cities of India as compared to last year. This number however depicts a lower base due to the reduction in sales in Q2 of last year. If we analyze on a QoQ basis, the sector witnessed a 58% plunge in the sales number in Q2.

Seeing the above stats, it’s safe to say that despite the abnormal year, investors are optimistic about their Real Estate Investments. Though the Q2 performance has shown a big dip, the lockdown story is the primary reason for it. The 3 reasons that affected the 2021 Q2 performance include:

• On-site Worker Shortage

• Reduced Manpower

• Delay in completion of the project

These factors have caused lower inventory which is also a major reason for the decline in sales. 

Key Real Estate Numbers of India’s Top 7 Cities :

• Total Housing Units Sold in the top 7 cities including Mumbai, Delhi NCR, Hyderabad, Chennai, Kolkata, Pune, and Bengaluru account for 24,570 units in the April-June Quarter.
• Amongst them, Mumbai Metropolitan Region and Pune contribute almost 46% in the above number.
• The quarter witnessed a notable amount of launches in the top 7 cities accounting for 36,260 units.
• Hyderabad was the leading city with maximum launches of 8,850 units followed by Mumbai and Pune registering 6,880 and 6,690 units respectively.
• Out of the total launches witnessed in the sector, 36% of them fall into the category of ‘80 Lakhs to 1.5 Crore Valuation’. The affordable housing sector has less than ‘40 Lakhs valuation’ records 20% of new launches, depicting a fall from the previous quarter’s number.
• The number of unsold inventory in these markets increased by 2% on a QoQ basis to 6,53,540 units.
• Despite combined unsold inventory increasing in number, the capital city Delhi NCR and financial capital Mumbai noted a decrease of 1% and 6% respectively in their unsold inventory. Thus, capital cities witnessed higher demand in the buyers’ segment.

Understanding the above numbers, India’s real estate picture depicts a mixed story with not much Covid-19 hit affecting the sector. Thus, thrusting on the positives, investors can look forward to Real Estate as their ‘go-to’ sector in 2021. Here are the positive takeaways from the current real estate scenario:

Positive Takeaways from India’s Current Real Estate Situation:

• Continuing Operations –

The 2nd wave of Covid-19 relatively didn’t force the country to announce a nationwide lockdown. Thus, local lockdowns put lesser restrictions on commercial activities like construction and so on. Thus, despite the decline in sales number, in the overall view, the sector seems to be gearing up to reach the pre-covid levels.

• Price Stability – 

According to the JLL report, the housing prices in all the top 7 cities remained more or less stable. Dealers provided minor discounts and attractive offers to boost their sales. The prices are expected to fluctuate within a specific range only. However, in some cities, due to supply shortages, the prices are seen to be rising. This is an added plus for investors looking to exit investments in emergencies.

• Easing Restrictions –

At the start of the third quarter from July, many states have eased the Covid-19 restrictions. Major cities like Delhi, Bengaluru, and Pune have begun to open up slowly and are moving forward to allow partial access to schools, colleges, and private offices. Therefore, the rental market will attract more demand and investors will be keen on leveraging it.

• Vaccination to boost residential demand –

The vaccination drive has taken speed in the country and is striving to vaccinate the major working-class population with at least the first dose to increase immunity. Moreover, in-office vaccination drives have also ramped up the pace of vaccination. This will probably upshift the residential as well as commercial space demands.

To put it in short, the Real Estate Sector of India is currently in wait and watch mode and preparing to capitalize on the future demand. Thus, developers are giving more focus to increasing the pace of construction of real estate units and keep their inventory ready. The ongoing third quarter is vital depending on the arrival of a possible third wave in the country. However, by now the sector is immune to the Covid shocks and shifted to take support of technology in its operations.

For starting your real estate investment journey at comparatively attractive prices, Assetmonk is the right place to be at! Assetmonk is a smart real estate investment platform offering customized investment solutions like Crowdfunding, Fractional Ownership, Long Term and Short Term investment options, Rental Yield, and so on. Operating in premium Indian cities like Hyderabad, Bengaluru, and Chennai, Assetmonk has optimized the returns for its investors to provide 14 to 21% annualized returns. To get started, visit our website today!