Sustained growth in property sales shows buyer confidence coming back: JLL

Anil Urs Bengaluru | Updated on March 25, 2021

Residential sales stood at 25,583 units in the first quarter of 2021

“The sustained growth in sales presents clear signs of demand and buyer confidence coming back to the market,” said Samantak Das, Chief Economist and Head Research & REIS, JLL.

“Sustained sales has been on the back of historically low home loan interest rates, stagnant residential prices, lucrative payment plans and freebies from developers, and government incentives such as the reduction of stamp duty in States like Maharashtra and Karnataka (for affordable housing). The ease of lockdown restrictions and the commencement of the vaccination drive have further aided in bringing buyers back to the market,” he added.

GDP growth

In the fourth quarter of calendar year 2020, India’s economy returned to growth territory, recording a 0.4 per cent rise in GDP. In tandem with the GDP growth, the pace of recovery in the residential market intensified with sales increasing by 51 per cent when compared to the previous quarter. In Q1 2021, sales of residential units continued an upward trajectory. Sales, at the overall level, increased by 17 per cent on a sequential basis.

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According to JLL Research, residential sales stood at 25,583 units in the first quarter of 2021 over 27,451 in Q1 2020. New launches in Q1 2021 witnessed 33,953 residential units, a jump of 27 per cent over Q4 2020.

According to Das, the pandemic tilted the scale further in favour of established developers. “As the sector shows signs of recovery, prominent developers are expected to be at an advantage and capture a greater share of the market.”

Referring to homebuyers, he said: “They have become even more cautious in their home purchase decisions. There is an increased preference for investing in projects by developers with an established track record. Only credible developers, who have execution capability as well as quality products, and conduct their business in a transparent manner will be able to operate in the post-Covid era in a sustainable manner. Ultimately, this will lead to greater transparency and improved consumer sentiment in the market.”

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On the affordable housing segment, Das said: “The government is committed to boost affordable housing. The recent Budget has extended the benefit of additional interest deduction on home loans for first-time homebuyers in the affordable segment. Further, there is a time extension to claim the tax holiday on profits from affordable housing projects until March 2022.”

“The housing loan going below 7 per cent for the first time in the last decade also triggered sales in all segments in residential real estate. The buoyancy in the market manifested in the form of low mortgage rates and stable prices are expected to continue and attract fence-sitters and serious end users,” said Siva Krishnan, Managing Director, Residential Services (India), JLL.

Published on March 25, 2021

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