This year presents unique challenges for India’s residential market. The implied real GDP growth of 5 per cent for FY 2019-20 in the second advance estimates of the National Statistics Office, is now at risk from the pandemic’s impact on the economy. The government has introduced several short-term relief measures to uplift the Indian economy from the immediate impact of the lockdown.
In India, the impact of the ongoing pandemic on business activities became more prominent since the beginning of March 2020. Even though new project launches came to a standstill in March, Q1 2020 witnessed a rise of 3% in new launches as compared to the same period last year. The homebuyer community deferred their purchase decisions in light of the impending crises, which led to sales dipping by nearly 30% in Q1 2020 on a y-o-y basis.
Launches and sales trends
Note: Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata. Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai. Source: Real Estate Intelligence Service (REIS), JLL Research
The recovery in the market will hinge primarily on the intensity, spread and duration of the outbreak in our country. If the current lockdown is not extended significantly, sales are expected to gain traction towards the end of 2020, with the onset of the festive season.