The residential real estate sector is on the cusp of another genesis, brewed by a dramatic shift to digitization on the backdrop of a menacing pandemic. While this much-needed transition trumped initial apprehensions and proved to be a stellar bet for the sector, looking at the record sales, it also augmented consumer confidence and brought back the fading trust & accountability to the sector.
If the old-fangled physical way of conducting business was an operational hurdle for the property sector, this new digitized era has erased all those demons and paved the way for a more fulfilling and comprehensive buying experience for homebuyers.
Real estate developers are on cloud nine looking at the tremendous response from homebuyers and gung-ho about investing in virtual experiences to ensure transparent and hassle-free property transactions.
A bountiful Q3 harvest
It’s comforting to hear that the earlier apprehensions about a Covid-induced slowdown in the property sector slowly evaporated as residential sales recovered to 50% of pre-Covid levels in July-September (Q3). Compare it to the muted April-June quarter of financial year 2020-21, and we see a colossal decline of almost 80% in housing sales.
Low-financing rates, attractive pre-payment plans, property price corrections, regulatory reliefs on stamp duty charges, and digital homebuying, together made a sweet concoction for homebuyers that translated into stupendous home sales in the third quarter.
According to latest reports, the bulk of the property sales online were driven by millennials in the age bracket of 32-38. The conditions mentioned above proved too irresistible as buyers rushed to find more spacious properties with open balconies and an abundance of sunlight & fresh air.
Home sales volumes surged 2.5 times to 33,403 units in Q3 of 2020, against 9,632 units in Q2 of 2020, while new launches saw an uptick to the tune of 4.5% to 31, 106 units in the third quarter of 2020 compared to 5,584 units in the previous quarter.
Value of houses surge amidst robust sales
The performance of real estate markets in tier 1 cities speak volumes about the lurking truth that good times are near. If we look at the top seven real estate markets, there is a 104% increase in home sales in the third quarter from the previous one, with Delhi NCR topping the shopping charts.
While the worst is over for the residential real estate sector, it’s also heartening to know that home sale values have increased more than 2.3 times to 29,731/- crore, up from 12,694/- crore in the previous quarter.
With the festive season knocking on the door, it’s no secret that home sale values will rise further during the festive months from October-December, owing to spilling pent-up demand, bottomed-out property prices, attractive financial schemes and lucrative festive offers from realty developers.
Real estate developers ready for a great festive run
With the smiles back on the faces of property developers looking at the phenomenal turnaround of the real estate sector, they are upbeat about making the most of the festive season.
Things have immensely improved for the property developers as the absorption rate of housing units has increased across cities, liquidity avenues have started to flow, and demand for homes is at its peak again.
Developers are busy prepping themselves for this grand once-in-a-year housing sale opportunity as offers, discounts and attractive payment schemes are readied to cater to the upcoming deluge of homebuyers.
With home prices remaining almost stable and the economy set to rebound in a grand fashion by next year, home buying sentiments will continue to improve in the coming festive months and translate to healthy transactions. The extension of RERA deadlines, reduction in stamp duty and liquidity infusion in stressed projects via the SWAMIH fund will reassure & amplify homebuying sentiments and also provide succor to developers. The early arrival of the vaccine is another silver bullet that will help the property sector stay off the panic mode and push it towards its heydays.