By Varun Singh

Newly-launched homes are back in demand after a prolonged period wherein the demand spotlight shone mainly on ready-to-move-in units. While end-users continue to drive the housing market and ready or soon-to-be-completed homes are still in the highest demand, new launches are finding takers again. Latest ANAROCK Research data shows that out of the total 2.37 lakh homes sold in 2021 across the top 7 cities, over 34% were newly-launched units.

In 2019, the sales share of newly-launched homes was lower. Of approx. 2.61 lakh homes sold in 2019, newly-launched homes accounted for approx. 26%. In 2020, of 1.38 lakh units sold in the top 7 cities, 28% were launched during the year.

Hyderabad accounted for the maximum absorption share of new units among the top 7 cities. Of 25,410 units sold in 2021 in the city, approx. 55% were launched in the same year. MMR saw the lowest absorption of newly-launched homes – of 76,400 units sold in 2021, just 26% were launched during the year. The remaining were old projects launched before 2021.

Anuj Puri, Chairman – ANAROCK Group, says, “End-users with a preference for ready-to-move-in or almost-complete homes continue to rule the roost. However, the demand scale is shifting gradually. Among other things, the increased sales share of newly-launched homes heralds the revival of investor interest. This is significant – over the last 3-4 years, investors had more or less exited the residential real estate stage and were focusing on other asset classes.”

“Also, well-capitalized branded developers with a reputation to protect have been ramping up their market share of new launches. Buyers are confident of such players’ ability to complete their projects on time. In 2021, of 2.37 lakh new units launched in the top 7 cities, the share ratio of branded vs non-branded developers was 58:42; in 2015, the ratio was 41:59.”

In any case, this trend bears watching. While the return of investors is positive from a sales point of view, an end-user driven market helps keep prices in check. As evidenced in the past, increasing investor activity can lead to faster price hikes.

City-wise Absorption Trends

The top two markets of MMR and NCR saw the lowest absorption share of newly-launched units at 26% and 30%, respectively. If we compare it to 2019, this share has risen in both cities in 2021 but continues to be lower than in other cities.

Essentially, buyers in NCR and MMR are cautious and opt for either ready or nearing completion homes, despite the higher prices. As per ANAROCK Research, NCR and MMR together comprise a massive 76% share of 6.29 lakh delayed/stalled units across the top 7 cities. These units were launched either in 2014 or before.

• In MMR, of 76,400 units sold in 2021, approx. 26% were newly-launched. In 2019, of 80,870 units sold, 23% were newly-launched
• In NCR, of 40,050 units sold in 2021, approx. 30% were launched in the same year. In 2019, of 46,920 units sold, the sales share of newly-launched units was 22%. Evidently, homebuyer confidence in this once highly troubled market is on the rise
• In Chennai, of 12,530 units sold in 2021, newly-launched units accounted for a 34% share – up from 28% of 11,820 units sold in 2019
• In Kolkata, of 13,080 units sold in 2021, 34% were newly-launched. In 2019, approx. 13,930 units were sold, of which 23% sales were of newly-launched units
• In Bengaluru, of 33,080 units sold in 2021, the sale share of newly-launched units was 35% – up from 27% of 50,450 units in 2019
• In Pune, of 35,980 units sold in 2021, the sale share of newly-launched units was 39% – up from 34% of 40,790 units in 2019
• Hyderabad comprised the maximum sales share of newly-launched units among the top 7 cities. Of approx. 25,410 units sold in 2021, 55% were launched in the same year – significantly up from 28% of approx. 16,590 units in 2019

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By Varun Singh

Gudi Padwa is an important festival for the real estate industry. During Gudi Padwa a lot of new launches take place. However, this year the developers have decided to put the new launches on a back seat.

Normally festivals are the seasons when developers come up with new project launches. Gudi Padwa is the one festival when developers in the Mumbai Metropolitan Region (MMR) host several new launches of projects.

However, things have changed. The real estate community was excited with the 1 per cent reduction in stamp duty and were hoping this will bring in more customers. Many developers had planned new project launches too. 

But now they are either being cancelled or pushed forward. Arvind Goel, a developer from Navi Mumbai said, “At the start of the month it looked like things were changing for real estate in a positive way. The reduction in stamp duty was helping change the mindset of the home buyers too. Many from the community had planned to launch projects, but now all has once again come to a standstill.”

According to Goel, a project launch is an expensive affair, and also requires a lot of people to be present at one place. “We were hoping that during Gudi Padwa the industry will see some sales taking place. But now with Corona, we cannot have so many channel partners (brokers) in one place. Also, customers won’t come out either so launches have been postponed,” he said.

Goel says the one death reported on Tuesday has caused further panic in the city and nearby areas. 

Gudi Padwa is an important festival for builders, because, many prospective homebuyers look for a home before vacation starts and they finalise everything before school starts. This is done so that things like moving and even admission of kids before the academic year is planned. 

However, Rajiv Jain, of Ruchika Shelters, a realtor from South Mumbai, claims that everything in real estate is being postponed, from planned project launches to smaller and big exhibitions. “There was a top developer going to have a project launch in Central Mumbai, he has dropped the idea, Many developers have asked its staff to work from home and follow up the clients from home itself instead of travelling all the way to the office,” said Jain. 

The problem is here to stay for long, according to another developer, “The advisory for social distancing has already impacted site visits which also means no actual sales. The majority of developers will also choose to defer new launches and shall wait to see how the situation unfolds over the next month or two.”

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