Residential Market Update: Q2 2021

August 02, 2021

The growth trajectory was derailed in the second quarter of 2021 as the second wave of the pandemic hit an unprepared India. Nevertheless, residential sales were far more resilient during the second wave when compared to the first wave. 

The first wave of COVID-19 restricted residential sales which dropped by a record 61% q-o-q in Q2 2020. However, the impact of the second wave has been limited. In fact, sales of residential units in Q2 2021 increased by 83% when compared to Q2 2020. While this is majorly due to the low base effect and less stringent lockdowns, it does provide indications of improved resilience.

New launches almost doubled in Q2 2021 compared to the same period last year. Despite states imposing lockdowns of varying intensities, developers launched projects across the seven cities. Most of the new launches in the markets of Bengaluru, Chennai, Kolkata, Mumbai and Pune were in the affordable and mid segments.

Residential prices in a majority of India’s residential markets have remained stagnant in the past few years. Developers in certain markets have been providing moderate discounts, attractive freebies including payment schemes such as no EMIs for a year which has led to a reduction in ‘effective prices’ for prospective homebuyers.

Most of the changes witnessed in the sector have been structural in nature and demand for homes is only expected to increase. Importantly, lockdown restrictions across cities are being eased and the vaccination drive is gathering pace. If the downward trajectory in COVID-19 cases is sustained, the sector is expected to make a healthy recovery in H2 2021.

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