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Home sales, launches gain pace as customer confidence recovers: JLL report

In the September quarter, Mumbai and Delhi-NCR each accounted for 21% of the total sales followed by Pune and Bengaluru. (Mint )Premium
In the September quarter, Mumbai and Delhi-NCR each accounted for 21% of the total sales followed by Pune and Bengaluru. (Mint )

On a sequential basis, sales improved by 65% during the September quarter compared to the preceding three months, prompted by lower covid-19 cases, robust vaccination drive which led to cautious unlocking of the economy in various states

BENGALURU : Residential sales in the first six months, between January and September, increased by 47% compared to the same period in 2020, across the top seven cities, according to property advisory JLL’s Residential Market Update – Q3 2021.
On a sequential basis, sales improved by 65% during the September quarter compared to the preceding three months, prompted by lower covid-19 cases, robust vaccination drive which led to cautious unlocking of the economy in various states.  
“Developers have already started launching optimal sized apartments to capture changing consumer preference across most of the cities. Indian residential sector is expected to witness sustained growth in the coming quarters. The renewed buyer’s confidence has been instrumental in the recovery of the housing market in Q3 2021, which recorded good volume of sales and launches as compared to the same period last year and almost inching towards the pre-covid era. Sales of more than 32,300 residential units were recorded in Q3 2021 against 19,635 units in Q2 2021, a significant increase of 65% quarter-on-quarter," said Siva Krishnan, head - residential, India, JLL.
Mumbai has been the largest contributor to sales over the past five quarters. In the September quarter, Mumbai and Delhi-NCR each accounted for 21% of the total sales followed by Pune and Bengaluru.
“Sales volume during the July-September quarter surpassed the sale volume recorded in the pre-covid period of Q1 2020 by 18%. Sales volume during the quarter also inched closer to the average quarterly volume of sales recorded in the pre-covid era of 2019, which stood at about 35,000 units. This indicates that the market sentiment is improving compared to the previous year and bringing back buyer’s confidence in the market," said Dr. Samantak Das, chief economist and head research and REIS, India, JLL.
The top seven cities under consideration witnessed fresh launches of 32,863 units in Q3 2021, an increase of 21% quarter-on-quarter. With the festive season around the corner, developers also continued to launch residential projects across the country. Most of the launches in Bengaluru, Mumbai and Pune were in the affordable and mid-income segments.  Hyderabad continued to dominate launches and accounted for about 29% of launches during Q3 2021. Pune and Mumbai contributed 23% and 19% respectively to the overall launches. 
However, project launches continued to remain below par when compared to pre-covid quarter of Q1 2020 (around 40,500 units) and the average quarterly launches witnessed in 2019 (around 34,000 units). Developers remain cautious in launching projects as they are focused on selling their unsold inventory and recovering sales volume of the past few quarters.
Unsold inventory in Q3 2021 remained mostly stable compared to the April-June quarter, as demand and supply dynamics remained steady. An assessment of years to sell (YTS) reveals that the expected time to liquidate this stock has increased marginally from 5.2 years in Q2 2021 to 5.3 years in Q3 2021. Sale of residential units has been on an upward trajectory and is projected to gain further momentum as the impact of the second wave wanes. Consequently, the market is expected to gain with YTS likely to decline over the short to medium term, JLL said.
Residential prices in most property have remained stagnant in the past few years. In the July-September period too, prices remained largely stagnant when compared to the previous quarter, across all the seven markets under review. With the festive seasons around the corner, developers are now offering various discounts such as straight-up price discounts, deferred payment plans and other incentives like no pre-EMIs for under-construction properties, waiver of floor rise and car parking charges and so on to attract fence-sitters and prospective home buyers.

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