Real estate prices rise 5-9% as home loans continue to be affordable: Report|Money Control
The price rally was sharpest for Pune and Chennai, at 9% (YoY) each respectively; Delhi-NCR sales down by 10%
The rise in input costs, inflationary pressures and premium attached with ready-to-move-in inventory has led to a 5-9 percent hike in the average value of new and available properties in top cities in the second quarter.
The spike has, however, had little impact on the homebuyer sentiment as the outlook towards overall economic scenario and income stability improved after the pandemic. There was no dent on either sales or launches during the quarter, according to the Real Insight Residential – April-June 2022 report, a quarterly analysis of India’s top eight residential markets by REA-backed PropTiger.com.
The study covered 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 4.9 percent, home loans remained largely affordable during the period. 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 at Housing.com, PropTiger.com and Makaan.com
While The 5-9 percent price rally was sharpest in Pune and Chennai at 9 percent on-year, the report said. Ahmedabad recorded an 8 percent surge, Bengaluru 7 percent and Delhi 6 percent.
According to the report, housing sales during the quarter ending June 30, registered a sequential 5 percent on-quarter in the calendar year 2022. Around 74,330 units were sold across the top eight in the second quarter as against 70,620 in Q1. The sharpest sequential increase in sales was seen in end-user-driven markets of Ahmedabad at 30 percent and Hyderabad at 21 percent. Kolkata was at 13 percent and Mumbai at 12 percent.
Sales in Delhi-NCR down 10percent
The demand in the Delhi-NCR market has been down mainly because of unavailability of the right product. NCR predominantly is an end-user market now, with homebuyer interest concentrated in ready-to-move-in (RTMI) properties, as also indicated by our consumer sentiment survey. “The age of available RTMI inventory is high and there are few launches due to developer consolidation. Hence, homebuyers don’t have much choice,” Ankita Sood, Head of Research, Housing.com, PropTiger.com and Makaan.com told Moneycontrol.
Gurugram is the mainstay of Delhi-NCR residential market with the highest share of 52 percent and 32 percent in new supply and sales. The city saw a decline in both demand and supply sequentially. While the majority of homebuyers are looking for ready-to-move-in properties, only 35 percent of the unsold stock in Gurugram falls in this category.
Also, the city has witnessed a 9 percent growth in the prices for supply and inventory, further pushing the buyers in a wait-and-watch mode amid the current economic scenario and lack of market incentives, she said.
The Noida residential markets followed the overall subdued trends of its counterparts in Delhi-NCR. The city saw muted supply and demand mainly because of stalled projects, insolvency proceedings against developers under the National Company Law Tribunal (NCLT), and incomplete infrastructure projects. The thinning supply and high age of unsold inventory have left homebuyers with fewer options in the markets, leading to a demand slowdown in Noida, she argued.
New products double in Kolkata
Growth in new supply superseded sales numbers, registering a quarter-on-quarter growth of 28 percent with 1,02,130 units launched in the second quarter as against 79,530 in the preceding quarter across the eight prime residential markets. New supply doubled in Kolkata on a quarterly basis, as per the report.
Although the residential registration process is hampered in Kolkata due to policy snags, the demand and supply are up in the city mainly due to low base effect, said Sood.
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. Mumbai had an unsold inventory of 272890 units or 38 months; Pune had 117990 units or 25 months and Delhi NCR had 99,850 units or 65 months, the report said.“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
For more information click the below link : https://www.moneycontrol.com/news/business/real-estate/real-estate-prices-rise-5-9-as-home-loans-continue-to-be-affordable-report-8754611.html
