Housing sales in top eight cities of the country dropped by 54 per cent year-on-year to a decadal low of 59,538 units during the first half of 2020 on account of COVID-19 pandemic, according to a Knight Frank India report released on Thursday.
New launches also fell by 46 per cent to 60,489 units. The pricing environment weakened with developers either offering a discount or some form of a financial benefit scheme to prospective homebuyers, said the report.
The unprecedented disruptions caused by on-going pandemic stalled the economy in Q2. The lockdown resulted in a complete shutdown of all activity in the real estate industry and caused sales to fall a massive 84 per cent year-on-year to 9,632 units in Q2 while sales of 49,905 units were reported in Q1.
The number of new home launches recorded in Q1 was 54,905 units whereas the number saw a sharp drop to 5,584 units in Q2.
Moreover, the office segment in top eight cities witnessed a historic decline in terms of both transactions and new completions. In H1, office transactions declined by 37 per cent year-on-year to 1.6 million square metres, the lowest in the last 10 years.
New completions were lower by 27 per cent to 1.6 million square metres. Despite the low volume of transaction and supply, the weighted average rental for the eight cities reported a growth of 4 per cent in H1 2020 to Rs 896 per square metre per month.
"With economic uncertainties creating significant headwinds, we expect the office space take-up to remain cautious. Most occupiers are expected to hesitate in committing to expansion in the current market scenario and may delay their leasing decisions for later," said Shishir Baijal, Chairman and Managing Director of Knight Frank India.