Housing sales surge 75% in H1 2021

Continuing on the recovery path, residential real estate sales recorded over 75 per cent growth in the first half of 2021 across India's top seven cities, according to real estate consulting firm CBRE's recent report 'Residential Real Estate in India - Challenges and future-proofing strategies for developers'.

Policy impetus from the Central and State governments, lowered lending rates from the Reserve Bank of India (RBI) and the incentives provided by the developers have encouraged housing sales, the report said citing that the residential segment has been showing green shoots of revival. States including Karnataka, Telangana, Maharashtra, and Tamil Nadu introduced measures like stamp duty cuts to boost the sales.

Pune led the sales activity with an approximately 26 per cent share, followed by Mumbai with 19 per cent. Hyderabad and Delhi-NCR contribute 18 per cent and 17 per cent of the housing sales respectively. While the report captures the recovery of residential real estate, it also highlights the factors that led to the growth of affordable and mid-housing sales in India, over the last decade.

Anshuman Magazine, Chairman, India and South-East Asia, Middle East and Africa, CBRE, said: "The residential segment has played a major role in the real estate sector's growth in India. The initiatives undertaken by the Central and State governments have been crucial and commendable for the revival in the residential segment."

He adds, "the past few Union Budgets were a testament to the government's commitment to affordable housing. With incentives such as the all-time low-interest rates on home loans, extension of moratorium period on loans, coupled with reduction in either circle rate or stamp duty across a number of states, residential has not only shown recovery but has become a great addition to asset portfolios."

Gaurav Kumar, Managing Director and Co-Head, Capital Markets, India, CBRE said: "As work-from-home and e-schooling have become the new lifestyle, the need for owning a home has dawned upon homebuyers across the nation. This has induced a wave of change in the industry as developers got back to their drawing boards to design more accommodative homes to align with the demand."

However, the developers are still navigating through issues such as limited availability of credit, tax and regulation complexities, construction delays due to skilled labour shortage, higher input costs and highly leveraged balance sheets of several developers have added another layer of challenge for the sector. The report discusses on how to navigate through these constraints to future proof their portfolios.