Notwithstanding the devastating second wave of COVID-19, Indian residential real estate sector staged a convincing comeback in 2021. During 2021, housing sales rose 71% with about 237,000 units sold, thus reaching 90% of pre-COVID 2019 levels with the Mumbai metropolitan region (MMR) recording the highest sales at 76,400 units, followed by the national capital region (NCR) with approx. 40,050 units sold, says a report.
Data shared by ANAROCK Property Consultants Pvt Ltd shows that during the year, around 237,000 units were launched across the top seven cities, touching the pre-COVID levels of 2019s. Yearly, new launches rose by 85% in 2021 over 2020.
Anuj Puri, chairman of ANAROCK group, says, “Despite the pandemic, 2021 was a fantastic year for the Indian housing sector. More or less an equal number of homes were launched and sold. The fact that launches were back to pre-COVID levels is very significant, and housing sales fell short of 2019 by a mere 10%. Of the four quarters, fourth quarter (Q4) of 2021 was by far the best, with housing sales in the top seven cities attaining a new high of about 90,860 units in Q4 2021. This was the highest quarterly sales performance since 2015."
Of the 237,000 units launched in 2021, the mid-segment (Rs40 lakh to Rs80 lakh) had the maximum share with 39%, followed by the affordable segment (priced under Rs40 lakh) with a 26% share. The premium segment, priced between Rs80 lakh and Rs1.5 crore had a 25% share, ANAROCK says.
According to the report, the tremendous rise in home-ownership aspirations was aptly supported by developer discounts and offers, government incentives like Maharashtra's stamp duty cut, and lenders maintaining decadal-low interest rates.
“Extrapolating on the performance in 2021, 2022 will see very satisfactory growth as long as the coronavirus pandemic remains in check in India," says Mr Puri. "Various trends will shape the sector in 2022 - Grade A developers will corner more market share, and sales will come back to the pre-pandemic levels of 2019. However, input cost pressure and supply chain issues may induce a 5 to 8% increase in property prices. End-users will remain the dominant market force, and peripheral areas of the larger cities will continue to see both supply and demand traction.”
Among the key cities contributing to launches in 2021, MMR, Hyderabad, Pune, and NCR, together accounted for 76% of supply additions. MMR saw around 56,880 units launched in 2021—a significant rise of over 88% over 2020. Out of this, about 58% of the new supply was added in the sub-Rs80 lakh budget segment
Hyderabad added about 51,470 units in 2021—a yearly increase of 144% over 2020 and a 71% increase over pre-COVID 2019. Here around 81% new supply was added in the mid-segment of Rs40 lakh to Rs80 lakh and the premium segment of Rs80 lakh to Rs1.5 crore budget range.
NCR added 31,710 new units in 2021 compared to 18,530 units in 2020—a significant rise of 71% and about 52% of the new supply here was added in the mid and premium segments.
During 2021, Pune added 39,870 units, a massive jump of 67% over 2020 where around 57% of the new supply was from the mid-segment.
According to ANAROCK, the top seven cities saw about 2,36,530 housing units sold in 2021, against 1,38,350 units in 2020 - a hefty increase of 71%.
MMR saw maximum yearly sales of around 76,400 units among the top cities. City sales increased by 72% to 76,400 units in 2021 from 44,320 units in 2020 due to a significant increase of 88% in new launch supply.
Hyderabad saw a huge 197% increase in sales to 25,410 in 2021 from 8,560 units in 2020.
NCR saw sales increase by 73% to 40,050 units in 2021 from 23,210 units in 2020, while Pune saw a significant sales increase of 53% to 35,980 units in 2021 from 23,460 units in 2020.
Bengaluru saw sales increase by 33% to 33,080 units in 2021 from 24,910 units in 2020. Chennai saw a hefty 86% increase in sales to 12,530 units in 2021 from 6,740 units in 2020 and Kolkata saw an 83% increase in sales to 13,080 units in 2021 from 7,150 units in previous year.
Talking about price movements, ANAROCK says, average residential property prices across the top cities increased by 3%-5% in 2021 compared to 2020. Bengaluru and MMR witnessed the highest price increase of 5%, while Chennai and Kolkata witnessed a 3% increase, it added.
Increased launches and overall absorption in the top-7 cities in 2021, when compared to 2020, resulted in minor changes in the available inventory.
However, compared to 2019, there has been a 2% reduction in available inventory by the end of 2021. Data indicates that the top-7 cities altogether have total unsold stock of about 638,000 units as of 2021-end. Among the top-7 cities, MMR and NCR saw a yearly decline of 10% and 5%, respectively, it added.