Housing sales in eight major cities of the country declined 54 per cent during January-June period to 59,538 units, the lowest in 10 years, as demand crashed after the imposition of the coronavirus pandemic-led lockdown late March, according to property consultant Knight Frank.
In its flagship report - India Real Estate: H1 2020 - released on Thursday, Knight Frank India said that housing sales fell 27 per cent in January-March to 49,905 units across eight major cities - Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad and Ahmedabad.
The sales plunged 84 per cent in April-June to 9,632 units as the lockdown affected demanded badly. Delhi-NCR, Chennai and Hyderabad had near-zero sales during the second quarter of the calendar year.
"After two years of steady demand, the home sales in top eight cities of India declined by a significant 54 per cent year-on-year (YoY) to a decadal low of 59,538 units during H1 2020 with sales mostly concentrated in the first quarter of calendar year," Knight Frank India said.
Housing sales in H1 of 2019 stood at 1,29,285 units.
New home launches reported a drop of 46 per cent to 60,489 units during January-June period of this year.
The weighted average prices have also fallen across most cities in H1 2020 with NCR, Pune and Chennai saw the most correction at 5.8 per cent YoY, 5.4 per cent YoY and 5.5 per cent YoY, respectively.
Information technology sector driven markets of Hyderabad and Bengaluru witnessed price growth of 6.9 per cent and 3.3 per cent during the same period.
About 47 per cent of home sales in January-June 2020 were in below Rs 50 lakh pricing category.
Knight Frank India CMD Shishir Baijal said, "The residential real estate sector which was already going through a rough patch has got severely hit by the current crisis. With income uncertainty for future, demand for housing will take a hit."
While the Reserve Bank of India (RBI) has announced much-required liquidity injecting measures and cut in policy interest rate, there is an urgent need for the government to come up with some demand boosting measures for the real estate sector, he added.
"As the second moratorium period ends in August, we hope that the government will make positive interventions such as onetime restructuring of loans for developers as well as extension of moratorium for retail loans (atleast for home loans) to ensure liquidity and low defaults," Baijal said.
According to the data, housing sales in Delhi-NCR fell 73 per cent to 5,446 units during January-June 2020 from 19,852 units in the corresponding period of the previous year.
In Ahmedabad, the demand plunged 69 per cent to 2,520 units from 8,212 units. Sales in Chennai fell 67 per cent to 2,981 units from 8,979 units, while Bengaluru saw 57 per cent decline to 12,177 units from 28,225 units.
Mumbai witnessed a decline of 45 per cent to 18,646 units from 33,731 units and Pune saw a fall of 42 per cent to 10,049 units from 17,364 units.
Sales in Hyderabad were down 42 per cent at 4,782 units from 8,334 units, while demand in Kolkata went down by 36 per cent to 2,937 units from 4,588 units.
Rajani Sinha, Chief Economist and National Director, Research, Knight Frank India said, "Given the economic uncertainties, consumers are hesitant to commit to a big-ticket purchase like housing. Launches have also got hit as the developers struggle with supply bottlenecks in the form of labour, raw material and credit availability."
While the quoted residential prices have fallen marginally, the effective price fall is in the range of 8-12 per cent and even more in some cases, if we take into account the indirect discounts being offered, she said.