While residential real estate market in India had hit a slump during the second wave of COVID, a new analysis by non-broking real estate data analytics and research firm Liases Foras, shows sales in tier-1 cities have increased by 42% with 263,611 units in 2021. However, the report also notes that sales are still 4% lower than pre-pandemic levels in 2019.
Data from the report indicates that sales across all tier-1 cities improved, with all cities showing an upward movement. Maximum gain in sales was witnessed in Bengaluru by 78%, followed by Chennai (56%), Pune (54%), Hyderabad (49%), Mumbai Metropolitan Region (MMR) by 35%, National Capital Region (NCR) by 25% and Kolkata (6%). Comparatively, overall sales had decreased in these tier-1 cities by 4% in calendar years (CY) 2019-21, with a maximum loss in Kolkata by 35%.
The higher sales momentum in residential real estate has helped Tier I cities reduce their overhang of unsold housing inventory in 2021, surpassing the pre-pandemic levels seen in 2019.
According to the report, the overall number of unsold residential stock saw a decrease with a 3% drop in 2021. While this decline is prevalent in most tier-1 cities, the unsold stock increased in Hyderabad by a significant 42%, in Ahmedabad by 9% and in Chennai by 4%. Bengaluru witnessed the maximum reduction in unsold stock by 22%.
The data from the Liases Foras report further goes on to show that, the months’ inventory, which is the time likely to be taken for clearing the total housing stock, decreased to 41 months in 2021 from 60 months, surpassing the pre-pandemic levels when the inventory was at 43 months in 2019. The inventory overhand of Bengaluru is the lowest among tier-1 cities at 23 months, while Chennai has the highest with 67 months.
The report also shows an increase in the weighted average prices across tier-1 cities by 3% in 2021. Prices in Ahmedabad and Hyderabad increased by 7% and 6% respectively, while all other tier-1 cities showed a marginal price increase.
Furthermore, Tier I cities had recorded new launches of 241,907 units in 2021, which is a 75% increase compared to 2020 when it was 138,577 units. New launches witnessed maximum gain in Hyderabad by a massive 232%, followed by Kolkata with 140%, NCR (126%) and Ahmedabad (123%). Comparatively, Pune, Chennai, MMR and Bengaluru saw lesser new launches in 2021.
While it may still be too early to say, data from the Liases Foras report seems to indicate a revival of the residential real estate market in India, following the decline during the COVID pandemic.