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New Launches Back At 2015 Levels: PropTiger Report
Housing prices register an uptick in the backdrop of rise in input costs, geopolitical issues and reversal of accommodative stance by the central bank, the report suggests
Photo Credit : Reuters
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.
“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 Vikas Wadhawan, Group CFO, Housing.com, PropTiger.com & Makaan.com.
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
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Growth in new supply superseded sales numbers, registering a quarter-on-quarter growth of 28% with. 1,02,130 units launched in the second quarter as against 79,530 in the preceding quarter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.
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.
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.
“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.com & Makaan.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.