“We are feeling cautiously optimistic about the residential market, driven by sales volumes in Mumbai and Delhi. Favourable factors such as low mortgage rates, attractive prices combined with developers’ lucrative payment plans reinforce the longer-term potential of the sector. For end users, the next 12 months are ideal to buy a house.” said Ramesh Nair, chief executive and Country Head, India, JLL.
“In the subsequent quarters, the translation of demand into sales will primarily hinge on enhanced consumer confidence, which in turn depends upon the continued implementation of progressive government policies amid the gradual revival of the Indian economy at large.” he added.
Residential market activity is also being supported by renewed interest from non -resident Indians in Q3 2020, resulting in more pent up demand in the market and increased enquiries received by developers.
“The further easing of lockdown restrictions and the upcoming festive season might help in bringing buyers back to the market. While the residential space remains unpredictable, favourable supply dynamics could deliver potential upside for both homebuyers and developers in the medium-term,” said, Samantak Das, chiief economist and head of Research & REIS, India, JLL.
New launches were restricted, with 12,654 units launched in the third quarter, a QoQ decline of 14 per cent, JLL said. Hyderabad and Mumbai accounted for over 60 per cent of the total new launches in the quarter. The drop in new launches was driven by Bengaluru, which witnessed a substantial decline of over 80 per cent as compared to Q2 2020.
Development focus on mid and affordable segments continued in Q3 2020 with nearly 75 per cent of the new launches in the sub Rs one crore category. Moving ahead, the focus on these price segments is expected to continue with developers focussing to reap the benefits of strong pent up demand.
The Q3 2020 witnessed sales outpacing new launches as unsold inventory across the seven markets (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata) decreased marginally from 459,378 to 457,427 units. Mumbai and Delhi NCR together account for more than 50 per cent of the unsold stock which are at various stages of construction.