In 2021, the housing sector is expected to fare better than 2020, but it is unlikely to reach the pre-COVID levels of 2019 - the most recent peak year. Housing sales in the top seven cities are expected to rise by 30 percent against 2020 and new launches may rise by 35 percent, a new report has said.
However, against the peak year of 2019, supply and sales may be lower by 28 percent and 31 percent, respectively, Anarock Research has said.
According to the report, housing sales are expected to increase 30 percent year-on-year (y-o-y) to 1,79,527 units across seven cities in 2021 from 1,38,344 units last year. In 2019, housing sales stood at 2,61,358 units across seven cities -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Hyderabad, Chennai and Kolkata.
The housing market in the top seven cities is likely to attain a new peak by 2023, when housing sales are estimated to cross 3.17 lakh units and new launches by 2.62 lakh units during the year.
With the vaccination drive gaining significant momentum and the spread of COVID-19 under better control for now, 2023 will very likely emerge as the new peak year that breaches 2019 levels with supply that year growing by 11% and sales by 22% over 2019.”
City-wise, MMR and Bengaluru are all set to lead from the front with maximum housing sales and new launches in 2023. Of the total estimated housing sales and new launches in 2023, MMR is likely to comprise a 28 percent share of total sales and nearly 30 percent of new launches; Bengaluru is estimated to have a 20 percent share of homes sold and a 17 percent share of units launched; NCR may comprise an 18 percent share of sales and 15 percent of new launches.
Pune will retain its strength among the most active markets and may corner a 15 percent sales share and 18 percent new launches share; Kolkata, Chennai and Hyderabad may each account for approximately 6 percent of sales and 8 percent of new launches, it said.
"The residential sector was showing healthy year-on-year growth since 2017 until the latest peak year of 2019, but this trajectory was derailed by the COVID-19 pandemic. Otherwise, 2020 was expected to be a watershed year for the housing sector," said Anuj Puri, chairman - ANAROCK Property Consultants.
"While the second half of the year did showcase the remarkable resilience of Indian residential real estate, a new bottom for the sector was created in 2020 with housing sales plunging to nearly 1.38 lakh units while new launches dropped to 1.28 lakh units. 2020 is not a year that the industry is likely to forget very soon,” he said.
“The trend of demand remaining buoyant can be attributed to several factors," he said.
"These include but are not limited to sustained low interest rates, an overall improvement on the job market, resumed economic activity and sustained stock market growth, various government interventions to combat the pandemic's deleterious effects, and an increasing desire to own physical assets during times of unprecedented uncertainty,” he said.
According to Anarock data, housing sales stood at 3,42,980 units in 2014; 3,08,250 units in 2015; 2,39,260 units in 2016; 2,11,143 units in 2017 and 2,48,311 units in 2018.