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Third wave puts a pause on home-buying spell in India
Real estate developers expect the buying momentum to regain normalcy only by February-end or in March
The pandemic’s third wave has severely dented sales of new homes in a sharp turn of events for India’s real estate industry that gained from a robust rebound in sales last year.
The shift in the business scenario followed a reasonably good quarter of sales for most property developers in the December quarter.
The March quarter is considered as a seasonally strong period for sales of residential properties, helping provide the last-mile push to developers for meeting their annual sales guidance.
With consumer worries over infections and government restrictions on mobility causing delays in site visits and decision making by potential buyers, virtual meetings have picked up, but developers expect the buying momentum to regain normalcy only by February-end or in March.
“Despite the fact that the impact of the third wave has been mild so far, there would be some setback for a while. But it will be short-term and we expect overall demand will come back by late February. Real estate or home-buying is sentiment-driven so there will be some delay in the buying process,” said Niranjan Hiranandani, vice-chairman-national, Naredco, and MD, Hiranandani Group.
In 2021, the top seven cities recorded sales of around 236,000 units. Housing sales in the December quarter crossed 90,000 units, the highest in 28 quarters, according to Anarock Property Consultants.
Factors such as positive homebuyer sentiment, all-time low home loan rates, and anticipation of imminent price hikes helped housing sales touch a new high, bringing down overall residential inventory overhang across the top cities.
Boman Irani, president elect, Credai National, an industry body said that the immediate impact of the outbreak has been a drop in walk-ins and site visits, as people are not stepping out due to the fear factor.
“January will be slow and there will be an impact on buying decisions, but it is expected that by March, this will subside and we would close the quarter with a hurrah. Sales are happening but customers are not stepping out,” Irani added.
Top developers are, meanwhile, gearing up for new launches in 2022, hoping to continue last year’s sales momentum.
Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Ltd, said Mumbai is recovering faster than states such as Karnataka and Kerala.
“The January-March period is a very good time for sales, but there is obvious hesitation this time. For the last 15 days, there has been a 40-50% fall in transactions because decision taking time has extended. However, virtual meetings have increased by 30-35%. Real estate is a high involvement process and the situation is still unpredictable. But we are expecting things to pick up,” said Vikas Chaturvedi, CEO, Xanadu Realty.
Property analysts said the impact of the third wave has been less harsh than before when infections rose sharply and with increased severity.
“I don’t foresee a substantial drop in the March quarter, but for a period of time, people would defer their decisions. Sales of new properties could see some slowdown but resale transactions will continue to do well,” said Pankaj Kapoor, founder and managing director, Liases Foras Real Estate Research & Rating Pvt Ltd.
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Business NewsCompaniesThird wave puts a pause on home-buying spell in India
First Published:18 Jan 2022, 12:31 AM IST
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