India: 7 top cities likely to attain new realty peak by 2023
Unprecedented rise in demand among aspiring homebuyers, predicts a leading property consultancy firm.
The Covid-19 crisis across India has failed to dampen sentiments in the real estate market. An analysis by a leading realty consultancy firm shows that the country’s seven top cities are likely to attain a new peak by 2023.
The unprecedented rise in homeownership sentiment, faster adoption of technology and digital marketing and innovative business practices have served to soften the overall impact of Covid-19 on the sector, according to Anarock Property Consultants. Housing sales in the seven cities are estimated to cross 317,000 units and new launches by 262,000 units during the year.
The densely populated Mumbai Metropolitan Region (MMR) and Bengaluru are expected to lead with maximum housing sales and new launches in 2023. While MMR is likely to account for 28 per cent of total sales and 30 per cent of new launches, Bengaluru is estimated to have a 20 per cent share of homes sold and a 17 per cent share of units launched.
The National Capital Region (NCR) is tipped to enjoy an 18 per cent share of sales and 15 per cent of new launches, while Pune is likely to retain its strength among the most active markets and may corner a 15 per cent sales and 18 per cent new launches.
Kolkata, Chennai and Hyderabad are expected to each account for six per cent of sales and eight per cent of new launches, according to the report. While 2021 is expected to fare better than 2020, it is unlikely to reach the pre-Covid-19-pandemic levels of 2019, which was the most recent peak year.
"The residential sector was showing healthy year-on-year growth from 2017 until the latest peak year of 2019, but this trajectory was derailed by the Covid-19 pandemic,” said Anuj Puri, chairman, Anarock Property Consultants. “Otherwise, 2020 was expected to be a watershed year for the housing sector. While the second half of the year did showcase the remarkable resilience of Indian residential real estate, a new bottom for the sector was created in 2020 with housing sales plunging to nearly 138,000 units while new launches dropped to 128,000 units.”
Puri said 2020 was not a year that the industry would likely forget anytime soon.
But the ongoing trend of sales exceeding supply is likely to continue and this year, it is expected to witness an increase of 35 per cent in housing launches and a 30 per cent increase in sales over the previous year. However, against the peak year of 2019, supply and sales may be lower by 28 per cent and 31 per cent, respectively.
“The trend of demand remaining buoyant can be attributed to several factors," Puri said. "These include but are not limited to sustained low interest rates, an overall improvement on the job market, resumed economic activity and sustained stock market growth, various government interventions to combat the pandemic's deleterious effects, and an increasing desire to own physical assets during times of unprecedented uncertainty,” he added.
Puri cited that the vaccination drive gaining significant momentum and the spread of Covid-19 under better control for now, 2023 will very likely emerge as the new peak year that breaches 2019 levels with supply that year growing by 11 per cent and sales by 22 per cent over 2019.
However, he added, “we’re unlikely to see the levels of supply and sales witnessed in 2014 anytime soon”.
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