Silver-Lining For Real Estate As Consumer Searches Grow: Report

While the outbreak of COVID-19 has taken a toll on India’ real estate sector with near-term property buying and renting decisions getting deferred, but a recent study showed that consumer searches for real etate property witnessed a growth of 5.3 per cent during the first quarter of the current calendar year.

According to Magicbricks’ PropIndex for the period of Jan-March, residential segment witnessed relatively less new supply amidst the COVID-19 scare as developers remained cautious in launching new projects due to limited off-take and tight liquidity during Q1.

However, the report showed that the overall supply represented by the number of listings on Magicbricks witnessed only a marginal decline of one per cent. Projects with ready-to-move status remained favourable among buyers and demand was heavily tilted towards the smaller configuration of one and two-BHKs across cities.

“The Government is taking stringent measures to contain the COVID-19 outbreak, but the long-term impact on property market is uncertain, and yet to be assessed. But it seems that the consumer interest has not tapered off. There is a pent-up demand for ready-to-move in properties as our data suggests that the 80 per cent of searches are happening in this segment and the rest for under-construction,” Sudhir Pai, CEO, Magicbricks, said.

As per the report, the southern cities of Hyderabad and Chennai witnessed the maximum increase in searches at 8.1 per cent and 6.4 per cent QoQ, respectively. Interestingly, Delhi and Kolkata also had more than 5 per cent increase in consumer searches. In contrast, Pune, which also faced head winds in 2019, witnessed a heightened consumer interest, rising by 5.2 per cent QoQ.

All cities in the National Capital Region (NCR) witnessed a fall in supply in Q12020, led by a 3 per cent fall in Delhi. Mumbai Metropolitan Region (MMR), which showed signs of weakness in 2019, had its supply effected, falling in both Thane and Navi Mumbai.

"Rise in demand and a slight fall in supply, led to marginal price increase in cities, where prices were stable in previous quarters, and stabilization in cities where prices were on a downward slope. Overall the Indian market grew by a marginal 3.6 per cent YoY, driven by cities such as Hyderabad, Chennai and Ahmedabad," Pai said.

"As things return to normalcy, the next two years would be crucial for the residential segment, as most of the stuck projects are likely to get completed with the help of the Rs 250 billion bailout fund. At the same time, completion of major metro lines should ease connectivity between peripheral and commercial areas, opening the next phase of growth," the report pointed out.