Bangalore The third wave of the pandemic has severely hit new home sales in a rapid turn of events for India’s real estate industry, which was fueled by a strong rebound in sales last year.
The business scenario changed after a good quarter of sales for most property developers in the December quarter.
The March quarter is considered as a seasonally strong period for residential property sales, helping developers provide a last mile push to meet their annual sales guidance.
Due to delays in site visits and decision-making by potential buyers due to consumer concerns over transition and government restrictions on mobility, virtual meetings have intensified, but developers expect the pace of purchases to normalize by the end of February or in March. Will be
“While the effect of the third wave is mild so far, there will be some aftershocks for a while. But it will be short-lived and we expect aggregate demand to come back by the end of February. Real estate or home-buying is sentiment driven, so there will be some delay in the purchase process,” said Niranjan Hiranandani, vice-president-national, NAREDCO, and MD, Hiranandani Group.
In 2021, the top seven cities recorded sales of around 236,000 units. According to Anarock Property Consultants, housing sales crossed 90,000 units in the December quarter, the highest in 28 quarters.
Factors such as positive homebuyer sentiment, all-time low home loan rates and anticipation of an impending price hike helped housing sales touch a new high, thereby overhanging the overall residential inventory in top cities.
Election Boman Irani, president of Credai National, an industry body, said the immediate impact of the outbreak is a drop in walk-ins and site visits, as people are not stepping out due to fear.
“January will be slow and will impact buying decisions, but hopefully by March it will subside and we will close the quarter with a bust. Sales are happening but customers are not exiting.”
Meanwhile, top developers are gearing up for new launches in 2022, hoping to continue last year’s sales momentum.
Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Limited said that Mumbai is recovering faster as compared to states like Karnataka and Kerala.
“January-March period is a great time for sales, but this time there is a clear hesitation. Transactions have dropped by 40-50% for the past 15 days as the decision-making time has increased. However, there has been an increase of 30-35% in virtual meetings. Real estate is a highly participatory process and the situation is still unpredictable. But we are expecting things to escalate,” said Vikas Chaturvedi, CEO, Xanadu Realty.
Asset analysts said the impact of the third wave has been less harsh than in the past when the transition increased rapidly and with severity.
“I don’t expect a big drop in the March quarter, but for the time being, people will defer their decisions. There may be some slowdown in the sale of new properties, but resale transactions will continue to perform well,” said Pankaj Kapoor, Founder and Managing Director, Liaise Foras Real Estate Research and Rating Pvt Ltd.
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