Active Stocks
Thu Mar 28 2024 13:59:22
  1. Tata Steel share price
  2. 155.60 1.80%
  1. HDFC Bank share price
  2. 1,454.10 0.93%
  1. Power Grid Corporation Of India share price
  2. 277.55 2.40%
  1. ITC share price
  2. 430.95 0.69%
  1. State Bank Of India share price
  2. 755.20 2.88%
Business News/ News / India/  Q4FY21 was the best quarter for listed developers in five years, says ICRA
BackBack

Q4FY21 was the best quarter for listed developers in five years, says ICRA

Sales across the top eight cities neared 85 million square feet, reflecting among the highest level of sales over the last twenty quarters, according to a report from ICRA

The pan India quarterly average sales in FY19 and FY20 was 84 msf and 81.5 msf respectively. Many listed players also recorded high performance levels, with key players such as Brigade Enterprises and Godrej Properties declaring all-time high residential sales and collections during the quarter according to the report.Premium
The pan India quarterly average sales in FY19 and FY20 was 84 msf and 81.5 msf respectively. Many listed players also recorded high performance levels, with key players such as Brigade Enterprises and Godrej Properties declaring all-time high residential sales and collections during the quarter according to the report.

NEW DELHI : Just before the onset of the second wave of the pandemic, the residential realty sector recorded one of its best quarters in Q4FY21, with sales across the top eight cities nearing 85 million square feet (msf), reflecting among the highest level of sales over the last twenty quarters according to a report from ICRA Ltd. The pan India quarterly average sales in FY19 and FY20 was 84 msf and 81.5 msf respectively. Many listed players also recorded high performance levels, with key players such as Brigade Enterprises and Godrej Properties declaring all-time high residential sales and collections during the quarter according to the report.

The recovery came after a crash in sales triggered by the pandemic in Q1FY21.

Measures such as stamp duty reduction in certain states such as Maharashtra and Karnataka (for houses priced up to 35 lakh), and discounts from developers have helped support the demand during the fourth quarter.

“Potential homebuyers, fence-sitters and home-renters increasingly took the plunge towards home-ownership, with the improvement in affordability over the past year further supporting their decision. The low home-loan rates, together with attractive discounts/payment schemes, resulted in improved affordability," said Mahi Agarwal, sector head and assistant vice president at ICRA.

However, the second wave is likely to dent the demand in sales by 40-50% in April 2021 relative to pre-covid averages, thereby derailing the recovery witnessed after the first wave despite the fact that home loan rates and tax sops for affordable housing remain intact.

The stamp duty reduction effected in Maharashtra has now expired. This reduction had bumped up sales in key cities such as Mumbai and Pune during August 2020-March 2021. Other cities, such as Hyderabad and Chennai, also recorded a fast pace of recovery on the back of continued commercial real estate activity, which, in turn, supported residential demand, and high proportion of lower-ticket-size housing.

“While fundamental demand drivers have strengthened, continued/further support measures, both on the demand and the supply side, would serve as key enablers for a timely recovery in residential realty industry. However, in line with ICRA’s earlier expectations, the recovery would not be uniform, and would instead take the form of a K-shaped recovery, with large-listed players recovering at a much better pace than smaller, unorganized players. In the absence of additional measures, though, the recovery period may get elongated, placing higher stress on developer cash flows, especially for the smaller ones who have built-up unsustainable debt levels on account of slow-moving inventory or high investment in land assets," said Agarwal.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 07 Jun 2021, 03:23 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App