According to a recent JLL research, new launches in the Mumbai residential market surged by 33% from 4,616 units in Q1 2021 to 6,143 units in Q2 2021. While sales in the city remained stable in the first quarter of 2021, transactions were concentrated in the price range of Rs. 50 lakhs to Rs. 1 crore, accounting for 40% of total sales.
With 25% of new launches, Eastern suburbs took the lead, followed by Western suburbs II (which includes Kandivali, Malad, Borivali, and Dahisar) with 22%. Thane and Navi Mumbai together accounted for nearly half of all sales in the city. In Q2 2021, the capital value of residential units in the city remained constant when compared to Q1 2021.
The cheap and mid-market segments (ticket sizes up to Rs. 2 crores) accounted for 84% of new launches in Mumbai during the quarter. Developers are likely to focus on these pricing categories in response to demand.
“The uptick in sales indicates that demand and buyer confidence are returning to the market. This is due to historically low house loan interest rates, stable residential prices, enticing payment plans and freebies from developers, and government incentives such as stamp duty reduction,” said Karan Singh Sodi, JLL India's Regional Managing Director.
Over the last five quarters, Mumbai has consistently been the greatest contributor to revenues, and this pattern continued in Q2 2021. During the quarter, the city contributed over a third of the total sales volume.
Residential sales in the top seven cities grew by 83% in Q2 (April-June) 2021 compared to Q2 2020. This was mostly due to a low base effect, less rigorous lockdowns, and accelerating vaccination campaigns during Q2 2021, according to JLL's Residential Market Update - Q2 2021, which demonstrated increased market resilience. Residential sales fell by a record 61% quarter-on-quarter during the first wave of COVID-19, reaching 10,753 units in Q2 2020. However, the second wave's impact has been modest, with sales falling by 23% to 19,635 units in Q2 2021.
“When compared to Q2 2020, the residential sector showed greater resilience in Q2 2021. The fact that the second COVID-19 wave damaged the market after a solid recovery curve cannot be denied. When compared to the same period last year, the impact was modest. The majority of the changes in the industry have been structural, and demand for housing is only likely to rise,” said Samantak Das, Head Research & Chief Economist at JLL India.
“The industry is anticipated to achieve a robust comeback in the second half of 2021 if the decreasing trajectory in COVID-19 cases is sustained,” he said.
Established developers will continue to run the show
In recent years, structural reforms in the real estate industry have begun to filter out smaller, unorganised developers from the market. The pandemic of COVID-19 tipped the scales even more in favour of established developers. Homebuyers have also grown more careful in making judgments about their homes. There is a growing desire for and readiness to pay a premium for initiatives that are led by developers with a good track record.
In H2 2021, new launches are expected. Between Q1 2019 and Q1 2020, fresh launches of more than 35,000 units were seen on average per quarter. In the COVID-era (Q2 2020 – Q2 2021), this has decreased to around 23,000 units, the report said.
Source: Money Control