Home Sales Surpass Pre-Covid Levels
An unfinished residential apartment project in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)  

Home Sales Surpass Pre-Covid Levels

Home sales in India’s top cities have surpassed pre-pandemic levels in the quarter ended March, aided by record-low interest rates, lower statutory levies in key markets and discounts offered by developers.

Reports by Anarock Property Consultants, Liases Foras and Knight Frank Research showed an increase in housing sales and new launches in the top cities. All three found that inventory fell.

That signals a return to normalcy in a sector grappling with a prolonged slowdown even before the pandemic. While reopening of the economy after a strict lockdown last year kick-started a recovery, the raging second wave of Covid-19 infections threatens to disrupt it.

To be sure, while the three property consultants point to similar overall trends, their findings vary because of different methodologies.

Also read: Strict Covid-19 Curbs Haven’t Stalled Construction In Mumbai This Time

Total Sales Rise

Anarock: Combined housing sales in the top seven cities rose to 58,290 units in the first quarter of 2021, according to its March 25 report. That’s a 29% increase during the same period a year ago.

Knight Frank: The property consultant reported a higher 44% rise in combined sales in the seven cities at 71,963 units.

Liases Foras: Total sales rose 9% across eight cities to 69,697 units, according to its report.

“Demand boosters like stamp duty cuts, further reductions in home loan rates by most banks (to 6.70%) and ongoing developer discounts and offers helped the residential sector stage a convincing comeback in Q1 2021,” Anuj Puri, chairman of Anarock Property Consultants, said.

The Knight Frank’s April 5 report said, “Considering this is the second consecutive quarter to cross the 2019 quarterly sales average, we believe the market is recovering well, if not having done so already.”

All three consultants reported housing sales growth across top cities except three.

  • While Anarock and Knight Frank found that sales rose in the National Capital Region over the pre-pandemic level, Liases Fora reported contraction.
  • While Liases Foras and Knight Frank reported identical growth in Bengaluru, Anarock found fourth-quarter sales flat in the city.
  • For Ahmedabad, Liases Foras saw contraction, while Knight Frank reported 34% growth.

Also read: The Risks Of Buying A Fiftieth Of An Office Or A Tenth Of A Vacation Home

Prices Stable

Prices in the top cities, according to the three reports, ranged between a small contraction to a marginal increase.

Anarock: Average property prices in all top seven cities barring Kolkata, according to Anarock, rose between 1% and 2% in the first three months of 2021 over the same period a year ago. Prices in NCR—India’s largest property market—and Bengaluru rose 2% during the year.

Liases Foras: Average price across tier I cities rose 2%.

Knight Frank: Average prices on an year-on year-basis have decreased for most cities except NCR and Hyderabad. On a sequential basis (quarter-on-quarter), housing prices have remained stable in most cities and recorded an increase in the case of the southern cities of Chennai and Hyderabad.

According to Knight Frank, increasing sales volumes have arrested the intensity of the year-on-year fall in residential prices of most markets.

“The incidence of developers giving indirect discounts or freebies has been a key factor in spurring sales in 2020 but this has been observed to have reduced significantly in Q1 2021,” it said. “In fact, on a sequential basis, housing prices have remained stable in most cities and recorded an increase in the case of Chennai and Hyderabad.”

Also read: Startup Kids To Stock Market Bulls In Rush To Buy Luxury Homes

More New Launches

Anarock: New launches in the top seven cities jumped more than 33% to 62,130 units in January-March.

Knight Frank: Rising sales encouraged developers to launch fresh projects. New units launched during the quarter rose 38% year-on-year to 76,006 units.

Anarock and Knight Frank reported a growth in launches across most cities barring two.

  • Both found a drop in new launches in Bengaluru.
  • While Anarock found an increase in Chennai, Knight Frank reported a drop.

Maharashtra’s decision to cut statutory levies on real estate boosted launches and sales in Mumbai and Pune, said Knight Frank. “These two markets benefited from significant regulatory impetus in the form of discounts in stamp duty charges that led to significant improvement in sales velocity.”

Liases Foras didn’t share new launches data.

Selling Older Stock First

While unsold units remained largely unchanged on a sequential basis across the top eight cities at 9.15 lakh units, according to Liases Foras, they declined over the previous year in most cities, led by Ahmedabad.

Months taken to sell inventory fell 26% sequentially and declined 15% over a year earlier, it said. “It’s the lowest in Hyderabad at 25 months and highest in Chennai at 63 months.”

Anarock: Overall unsold stock in the first three months of 2021 over a year ago was negligible as new supply between Q4 of 2020 and Q1 2021 outpaced overall absorption numbers.

Mumbai Metropolitan Region witnessed the highest yearly reduction in unsold inventory of 8%, while Bengaluru and Kolkata witnessed yearly reductions of 7% each, Anarock said. In contrast, unsold stock increased by 81% in Hyderabad in the same period, due to considerable new supply hitting this city in the last two quarters.

Knight Frank: Homebuyers are more inclined to acquire ready or near-ready inventory to minimise completion risk. This is reflected in the average age of inventory staying at 16.7 quarters in January-March 2021 compared with 15.9 quarters a year earlier, it said.


The recent spike in Covid-19 cases in the country must be factored in for the future, said Shishir Baijal, chairman and managing director of Knight Frank India. “We’re yet to understand the complete impact of the ‘second wave’ on the economic activities and resulting wealth creation.”

The state with the largest demand—Maharashtra—has introduced strict curbs for April and first half of May, which apart from the fact that stamp duty has been reverted to its previous levels, will also lead to severe restrictions of public life, he said. “The sector will have to tread carefully to maintain the recently acquired momentum.”

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