Housing demand falls 37% across 8 major cities in 2020

Housing sales in the national capital region (Delhi-NCR) plunged 50 per cent year-on-year during the 2020 calendar year to 21,234 units on low demand because of the Covid-19 pandemic, property consultant Knight Frank India said on Wednesday.

The sales of residential properties fell 37 per cent to 1,54,534 units in 2020 across eight major cities as compared with 2,45,861 units in the previous year, the consultant said in its ‘India Real Estate - Residential and Office Update H2 2020’ report.

Housing sales fell in all eight major cities, with demand falling most in Ahmedabad and least in Pune.

According to the data, housing sales fell 18 per cent in Pune to 26,919 units during 2020 from 32,809 units in the previous year.

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Mumbai saw 20 per cent decline at 48,688 units last year from 60,943 units during 2019.

Stamp duty

The Maharashtra government’s decision to temporarily cut stamp duty on registration of properties led to higher sales in Mumbai and Pune region during the last four months of 2020 calendar year.

Housing sales in Delhi-NCR decreased 50 per cent to 21,234 units from 42,828 units, while demand slumped 51 per cent in Bengaluru to 23,579 units from 48,076 units during the period under review.

In Chennai, sales fell 49 per cent to 8,654 units in 2020 from 16,959 units in the previous year.

The sales of residential properties in Hyderabad declined 38 per cent to 10,042 units from 16,267 units. Kolkata saw 21 per cent fall in sales to 8,912 units from 11,266 units.

Ahmedabad was worst hit, with sales down by 61 per cent to 6,506 units in 2020 from 16,713 units in the previous year.

Also Read: Ahmedabad, Pune, Chennai most affordable housing markets of 2020: Knight Frank Survey

Encouraging sales

Knight Frank India CMD Shishir Baijal said, “Despite the on-going pandemic, the H2 2020 sales growth in some cities is fairly encouraging. In Q3 2020, the real estate market started witnessing revival signs, further recording a significant improvement in homes sales during Q4 2020.” Out of the total sales number in H2 2020, he said Mumbai and Pune contributed around 50 per cent in home sales.

“This marvellous performance can be largely attributed to the state government’s decision of reducing stamp duty in Maharashtra. The other state governments would need to jump into the bandwagon or offer something similar to bolster demand across their markets,” Baijal said.

The RBI’s decision to maintain low repo rates has narrowed the margin between rent and home loan EMI paid to banks, he said.