Sale of residential units registered almost 50% annual decline: Report

Sale of residential properties in the National Capital Region (NCR) fell by nearly 50% last year from 2019, as per a report released by real estate consultancy Knight

Sale of residential properties in the National Capital Region (NCR) fell by nearly 50% last year from 2019, as per a report released by real estate consultancy Knight Frank India on Wednesday.

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Last year, 21,234 housing units were sold in the NCR, a steep fall from the 40,000-odd units sold in 2019, as per the report. The third and fourth quarters of 2020, however, witnessed a strong recovery as the pent-up demand caused by the nationwide lockdown gave a push to sales and helped improve the figures.

As per the data shared in the report, Gurugram accounted for nearly 29% of all housing sales in NCR. However, the share was 18% lesser than in 2019. The slowdown in sales was caused due to the lockdown, which also changed the dynamics of the real estate market in the city. Developers, who earlier focussed on premium housing, are now expanding their offerings to mid-income and affordable housing projects, the report stated.

In 2020, Greater Noida emerged as the top destination for residential sales in NCR, accounting for 39% of the housing units sakes, followed by Gurugram, Ghaziabad, Noida and Faridabad.

The reason for Greater Noida’s emergence as the top destination, say experts, is that units were available in the Rs 40 lakh to Rs 60 lakh price range, in the mid-premium segment. The maximum sales were reported in the above Rs 50 lakh category, the report said.

Gurugram, however, witnessed maximum launches in NCR, accounting for around 47% of the residential units launched in the city, as well as in areas along the Dwarka Expressway and Southern Peripheral Road.

Of the total launches in NCR, Greater Noida accounted for 20%, Ghaziabad 19%, Noida 11% and Faridabad 3%. Overall, the NCR witnessed a 57% decline in new project launches last year, the report stated. It also identified Ghaziabad as the new real estate hotspot in NCR, as it has been witnessing a constant rise in new launches and sales since 2018.

Another key development in real estate markets that was seen in 2020 is that there was greater demand for plotted developments due to ease of getting possession as well as lower cost of units, the report observed.

Mudassir Zaidi, executive director, north, Knight Frank India said, “While Gurugram and Noida continue to lead on various residential asset class statistics, Ghaziabad is seen continuously gaining its dominance on the NCR’s residential map. This is largely due to developers trying to capitalise on the latent demand in locations where affordable and mid-segment products have been receiving good response from buyers.”

Overall, the report observed that while both sales and launches remained low in the wake of the pandemic, cheaper home loans, lower pricing and pent-up demand led to a faster recovery in sales leading to a 9% annual decline in unsold inventory and predicted a brighter picture for 2021.

“The substantial decline in residential sales during 2020,compared to 2019,was on expected lines as the pandemic completely washed away two quarters. But then there is a silver lining in big uptick in sales during festive months of October-December which holds great hope for a good run in 2021.Though many attribute this spurt in sales to purely pent-up demand, I believe that it has a lot to do with the genuine desire of people to own homes. This is evident from significant rise in the sale of mid-segment homes due to safety and WFH factor. With expected range bound prices and low interest rates with fiscal incentives to continue, housing should register a substantial growth in 2021 across major cities including NCR, though uncertainty about jobs still remains a challenge,” said Vinod Behl, city based real estate expert.