Housing demand in Q3 rises 13% on-quarter, supply up 6.6%, says Magicbricks PropIndex

The residential real estate industry is showing signs of recovery after experiencing serious economic repercussions caused by the pandemic-observed a pan-India quarterly increase in demand of over 13% during the quarter, showed the Magicbricks PropIndex for September quarter.

The aggregate supply in the country also witnessed nearly 8% sequential rise during the period. With the Covid-19 infection rates dipping and the onset of the festive season, the demand for homes in the country is further slated to grow.

Key property markets of Ahmedabad, Mumbai Metropolitan Region (MMR), Delhi-NCR and Pune witnessed a remarkable surge in both demand as well as new supply in their respective markets. In each of these cities, peripheral locations continued to gain and garner attention.

The pan-India prices witnessed a sequential growth of 0.3% during this period displaying high resilience of the housing markets. It is expected that this trend will continue for a few more quarters, until unsold inventories decrease significantly, as most developers are expected to focus largely on launching affordable and mid-range homes.

“With festive season round the corner, the market is further expected to grow. There is more clarity in the minds of consumers who were earlier waiting to buy properties even as they waited for the pandemic to ease. These factors have brought optimism amongst developers as they prepare to announce several new launches. Peripheral regions remained the epicenter of demand spurred by easing of restrictions, which helped to boost large scale economic activity and improve buyer confidence,” said Sudhir Pai- CEO of Magicbricks.

He attributes the recovery to factors such as reduction in guidance value, digitization of land records, housing schemes launched by the government and liquidity infusion through the government-backed SWAMIH fund.

Among key cities, Mumbai’s residential market witnessed a sequential spike of 5% in demand. Navi Mumbai and Thane witnessed spikes of 19% and 10.5% in demand respectively. The demand growth was predominantly supported by the new supply in the market, which went up 15% in Mumbai, 9% in Navi Mumbai and over 6% in Thane during the period.

The housing market in MMR is expected to pick up further due to the reduction in cases of COVID-19 and the ongoing festive season and prominent developers are preparing for new launches in the mid and affordable segments.

The property market of Delhi witnessed 29.1% sequential growth in demand. The under-construction properties witnessed an increase in prices across all price segments. On the other hand, Ready-to-Move properties did not see any major sequential change in prices during the last 5 years due to limited demand for the existing properties.

Bengaluru’s residential real estate witnessed mixed performance as demand increased by 6% and supply decreased by 4% during the quarter. Given the relaxations in mobility and increase in business operations, the city saw more buying interest as developers attract new home buyers by offering pre-EMI option and 12 months payment holiday.

(Magicbricks is a part of Bennett, Coleman and Company Limited, which publishes The Economic Times)