Indian real estate may be all set for a bumper festive season, but the post-festive scenario in Indian real estate could see some serious consolidation, in the residential market. If the numbers are anything to go by, big developers with deep pockets could be in for a windfall thanks to expanding market share and a newfound willingness to buy residential real estate.
“There will be consolidation, as customers are willing to buy from larger brands. There is no doubt that the market is consolidating towards larger players who are showing the ability to deliver homes on the ground and thus take a larger chunk of the market for themselves,” said Abhishek Kapoor, Chief Operating Officer, Puravankara, “The market size may not increase but the market share of larger brands will certainly go up.”
There is some semblance of reason in Kapoor’s views. With home-buyers making use of historically low-interest rates and reduction in stamp duty in cities like Mumbai, not to mention bumper festive offers, several top developers — the ones with the wherewithal to bounce back from the COVID-19 slump — have already reported numbers that seem to indicate a stunning post-pandemic recovery.
Early this month, Lodha told CNBC-TV18.com that it had registered stellar quarter-on-quarter sales growth, ever since COVID-19 restrictions began easing out. Other real estate developers are now reporting similar numbers.
Embassy: 200 homes sold in 45 days
“There has been an 85 percent jump in quarter-on-quarter sales volumes in the July-September quarter, as buyers have slowly begun closing deals with developers,” said Shambhavi Kadam, Head, Product Strategy (Residential), Embassy Group, “We have sold in nine months this year, what we would have taken six months to sell last year.”
Although the Embassy’s sales numbers point to an unexpectedly impressive post-COVID recovery, it’s the pace at which the company has recovered that has made heads turn. Sample this: between August and September — a period of 45 days — the company sold 200 homes in its flagship Embassy Springs project, in North Bengaluru. The company believes that the numbers are a sign of things to come. They aren’t far from analysts’ projections for the festive season.
According to Anarock, the October-December quarter could see residential sales jump by as high as 35 percent when compared to the previous quarter. “The upcoming festive season will prompt many fence-sitters to avail the best deals on offer,” said Santosh Kumar, Vice Chairman, Anarock Property Consultants, “Developers have pulled out all the stops to attract buyers, announcing schemes for the festive season, many of which result in an actual reduction in the cost of acquisition.”
Mumbai, the top performer
As per Anarock’s data, Chennai could see a 20 to 25 percent quarter-on-quarter spike in sales volumes in October-December, while NCR is all set to register a 27 to 31 percent spike in these volumes. Nearly 1,600 homes were sold in Chennai between July and September, while NCR accounted for 5,200 residential sales.
Bengaluru and the Mumbai Metropolitan Region (MMR) are projected to outperform, with Anarock pegging the former set to register a 35 percent rise in residential sales in October-December, over its 5,400 homes sold in July-September. MMR is all set to sell 36 percent better in October-December, on the back of reduced stamp duty and a slew of developer discounts. The MMR market registered 9,200 residential sales in July-September.
Puravankara: Better festive sales this year than in 2019
While the overall numbers make for encouraging reading, Embassy says it has reason to believe that the luxury sector alone could see a 15 percent quarter-on-quarter jump in sales volumes in the ongoing festive quarter.
Real estate companies like Nahar are in agreement. “With home loans being at a ten-year low and encouraging pre-Dussehra sales, there is every indication that more people will look to buy homes in the months to come,” said Manju Yagnik, Vice Chairperson, Nahar Group. “What we will begin seeing is a slew of serious buyers going about making real estate purchases,” Yagnik added.
Puravankara has stuck its neck out and projected a better festive season for itself this year when compared to 2019. “We just launched three projects in 6 months and have a pipeline of 11 projects this year,” said Kapoor, “The fact that we are going to keep launching is a nod to the reality that we are very optimistic of present-day demand, which we believe is sustainable. This festive season is going to be better than the one last year.”
(Source: CNBC Tv18)