The COVID-19 pandemic has had considerable impact on the Indian housing sector. Residential sales saw a 42% y-o-y drop in the first quarter of 2020, reveals the latest data by ANAROCK. In Q1 2020, residential sales in the top 7 cities stood at 45,200 units, against 78,510 units a year ago. On a q-o-q basis, housing sales fell by 24%.
Meanwhile, new launches too fell by 42% annually - from 70,480 units in Q1 2019 to approximately 41,200 in Q1 2020. Q-o-q supply also declined by approx. 21%. Yearly trends indicate that Mumbai Metropolitan Region (MMR) and Pune recorded the maximum y-o-y drop of housing supply - by 61% and 56% respectively - while Chennai and Kolkata actually displayed positive trends with nearly 16% and 8% yearly rise.
Anarock Property Consultants Chairman Anuj Puri says, “Given the ongoing global healthcare calamity, it’s no surprise that housing sales and new project launches across India’s top 7 cities decreased both on yearly and quarterly basis. As expected, monthly data trends reveal that March – the month when most advisories and lockdown were imposed - saw a steep decline in both new launches and housing sales against the preceding two months.’’ He further noted, “The Government has taken an inarguably necessary hard-line stance to curtail the spread of the virus. The lockdowns have stalled construction activity and will lead to project delays in the future, but this is a reality the sector must accept and live with.”
According to Anarock, the only silver lining is that developers were able to shed nearly 3% of their unsold inventory in a year – from 6.65 lakh units in Q1 2019 to over 6.44 lakh units in Q1 2020. On a quarterly basis, the decline was just 1%.
Unsold Inventory till Q1 2020: With new supply and housing sales remaining subdued in the quarter, unsold inventory saw a marginal decline of 1% on a quarterly basis - from 6.48 lakh units in Q4 2019 to 6.44 lakh units by Q1 2020, and 3% y-o-y - from 6.65 lakh units in Q1 2019 to 6.44 lakh units by Q1 2020.Bengaluru and Kolkata witnessed the highest yearly reduction in unsold inventory with 6% each from Q1 2019 to Q1 2020.
However, unsold inventory increased by 10% in Chennai in the same period.
