India’s real estate sector is going through a serious crisis due to the economic shock triggered by coronavirus crisis. Housing sales have plunged over 80 per cent in the second quarter of 2020 in comparison to the figure in the corresponding quarter last year, according to research conducted by ANAROCK Property Consultants.
The real estate consultant said housing sales have plunged to a “new low” across India’s top seven cities in Q2 2020. The latest research conducted by ANAROCK revealed that residential sales in the quarter plummeted by 81 per cent in top cities — from 68,600 units in Q2 2019 to just 12,720 units in Q2 2020.
New launches have suffered even more with a 98 per cent dip in the second quarter with merely 1,390 units getting launched. These new launches are just part of four projects — two in Bengaluru and one each in Pune and Kolkata.
“If we consider q-o-q data trends, housing sales dropped by 72% in Q2 2020 against Q1 2020 while new launches fell by 97%,” ANAROCK said.
Commenting on the weak outlook, ANAROCK Chairman Anuj Puri said, “A massive drop in both new launches and housing sales were, of course, expected on the back of a complete lockdown for most of this quarter.”
Also Read | Coronavirus: How Covid-19 is hurting India’s ailing real estate sector
“Interestingly, MMR one of the most COVID-19-affected cities witnessed maximum housing sales of nearly 3,620 units among all cities, followed by Bengaluru with approx. 2,990 units. Technology adoption has played a big role in housing sales of late, with many developers now strengthening their digital sales capabilities,” he added.
The above research by ANAROCK offers a glimpse into the turmoil in the real estate sector, which is a major contributor to India’s GDP.
The sector which was allowed to operate after the government eased lockdown norms earlier this month has not being able to gain a footing yet due to several difficulties — absence of labourers who have migrated and liquidity crunch in the wake of the situation.
Even then, many developers had maintained property prices in anticipation of a speedy revival. However, the prolonged lockdown seems to have gone against their calculation.
Now, many reports suggest that some properties are witnessing a fall in prices, especially luxury properties in cities like Mumbai and Delhi.
While most experts believe that price cuts in real estate can be negotiated on a case-to-case basis, the real issue that the sector is facing is lack of demand. They also believe that only a proper revival of the economy, especially in terms of urban jobs, can boost prospects of the sector.
Also Read | Real estate in NCR: Why builders are struggling to reboot
Also Watch | Race for coronavirus drug intensifies, experts share interesting facts