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COVID-19 effect: Housing sales drop 66% in April-June; new supply down 81%, says PropEquity

COVID-19 effect: Housing sales drop 66% in April-June; new supply down 81%, says PropEquity

COVID-19 effect: Housing sales drop 66% in April-June; new supply down 81%, says PropEquity
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By Timsy Jaipuria  Jul 13, 2020 3:10:34 PM IST (Updated)

Among the worst-hit sectors due to the coronavirus-induced lockdown has been the real estate industry. Real estate sales were already not seeing many take-offs in the pre-COVID period and the crisis led by the pandemic has only made things worse for the already struggling sector due to the halt in construction activities, all of a sudden pull-back on spending and uncertainty of incomes.

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According to a recent study by PropEquity, a real estate data, research, and analytics firm, sales or absorption of housing units dropped by 66 percent across the top nine cities in India in the second quarter of the calendar year 2020 to 21,294 units versus 62,851 units in Q1 of the calendar year 2020.
The new supply or launches of housing units also decreased by 81 percent during the same period to 11,967 units from 63,535 units in Q1 2020 as developers hardly launched any new projects as sales went to a standstill, the study said.
Noida was the city with zero new launches in Q2. Most of the new launches in other cities took place only after the lockdown restrictions were relaxed by the third week of May.
"Noting the unprecedented times, the real estate sector which was slowly coming up by March was hit with a complete halt in construction and sales activities by March last week. We believe larger developers with low debt leverage will ride out the storm and will do reasonably well by Q3 onwards within the context of the new normal. We may witness resizing of units, discounts, amenities and special payment schemes to be offered by developers to create demand, especially during the upcoming festive season,” said Samir Jasuja, founder and managing director at PropEquity.
According to a city-wise analysis, for Gurugram, the new launches stood at 138 units in Q2’20 with 81 percent fall, whereas, sales also decreased by 65 percent in the sequential quarter at 361 units.
In Q2’20, Noida witnessed a 100 percent fall in new launches on a Q-o-Q basis. Whereas, sales decreased by 26 percent to 1,177 units during the same period.
In Mumbai, new launches witnessed a decrease of 85 percent on a quarterly basis with 906 units launched in Q2’20 while the absorption dropped by 62 percent to 2,206 units.
Kolkata witnessed 550 new launches in Q2’20, decreasing by 73 percent on a Q-o-Q basis. Sales dropped by 70 percent to 1,046 units in Q2’20.
Hyderabad saw a decline of 79 percent in new launches on a quarterly basis. The new launches stood at 1,239 units. Sales also fell by 73 percent to 1,522 units.
India’s IT capital Bengaluru saw a quarterly downfall of 45 percent in new launches with 5,231 units launched in Q2’20. Sales dropped by 66 percent to 2,818 units during the same period.
Pune witnessed a new supply of 1,296 units in Q2’20, which is 92 percent lower than the launches in Q1’20, absorption also decreased by 69 percent to 5,169 units.
As compared to the previous quarter, Chennai saw a decline of 92 percent in new launches in Q2’20. The new launches stood at 350 units. Sales also decreased by 70 percent to 996 units in Q2’20.
Thane witnessed a decrease of 88 percent in new launches on a quarterly basis with a new supply of 2,257 units in Q2’20; absorption stood at 5,999 units, decreasing by 65 percent on a quarterly basis.
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