Residential home sales recover by 90 per cent in Q1, 2021: JLL report

 Residential home sales in the first quarter of 2021 have recovered by over 90 per cent of the pre-COVID levels across top seven cities and new launches witnessed a 27 per cent jump over Q4 2020, according to JLL Residential Market Update - Q1 2021 research report.

The report said 25,583 residential units were sold in Jan-March quarter of 2021 compared to 27,451 units sold in Jan-March quarter of 2020. Mumbai showed a recovery of 84 per cent compared to pre-COVID levels with 5,779 units sold in this quarter compared to 6,857 in Q1 of 2020. Neighbouring Pune, however, has recovered fully and clocked 3,745 unit sales in this quarter compared to 3,728 units sold in Q1 2020.

Barring National Capital Region and Bengaluru which 92 per cent and 57 per cent recovery compared to pre-COVID levels, Chennai, Hyderabad and Kolkata showed Pune-like over 100 per cent recovery, the report said. 

Sales volume increased across most markets

	Q2 2020 (in units)	Q3 2020 (in units)	Q4 2020 (in units)	Q1 2021 (in units)	Growth (%) Q1 2021 over Q4 2020
Bengaluru	1,977	1,742	2,535	2,382	-6%
Chennai	460	1,570	2,500	3,200	28%
Delhi NCR	2,250	3,112	4,440	5,448	23%
Hyderabad	1,207	2,122	3,570	3,709	4%
Kolkata	481	390	438	1,320	201%
Mumbai	3,527	4,135	5,026	5,779	15%
Pune	851	1,344	3,323	3,745	13%
Total	10,753	14,415	21,832	25,583	17%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

 

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

“In the fourth quarter of calendar year 2020, India’s economy returned to growth territory, recording a 0.4% rise in GDP. In tandem with the GDP growth, the pace of recovery in the residential market intensified with sales increasing by 51% 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% on a sequential basis,” he added.

Delhi NCR witnessed the maximum new launches jumping up from 699 units in Q3 of 2020 to 2,244 in Q4 and 4,734 units in Q1 of 2021, an increase of 111 per cent. Mumbai, which not only enjoys the 2 per cent stamp duty rebate but also 50 per cent reduction in premium costs announced by the Brihanmumbai Municipal Corporation, also saw new launches jump from 2,294 units in Q2 of 2020 to 4,616 units in Q1 of 2021, a jump of 43 per cent over last quarter. Pune also witnessed a 57 per cent increase in new launches. Across seven cities, the new launches shot up from 14,780 in Q2 of 2020 to 33,953 units in Q1 2021. The focus in new launches remained squarely on affordable housing with 69 per cent of the new launches in the sub Rs 1 crore category homes, the report said.

“The Government is committed to boost affordable housing. The recent Union 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% for the first time in the last decade also triggered sales in all segments in the 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

The report pointed out that the COVID-19 pandemic has decisively shifted the home buyer’s focus in favour of established developers. Cautious home buyers are giving increase preference to developers with sound execution capability, transparent business operations and offering quality products.

The report said the residential market will continue to be a “buyer’s market”. Though home prices have remained largely stagnant across all seven cities, in some markets, developers continue to offer attractive freebies like stamp duty rebate, no EMIs for 12 months and payment schemes to woo the fence-sitters into the buying decision.

 

Mumbai bars get relief as BMC withdraws circular on liquor sales

 Restaurants and bars in Mumbai have got relief after the Brihanmumbai Municipal Corporation (BMC) on Saturday withdrew its notification restricting liquor sales in restaurants to 11.30 pm.

 The notification was issued on Friday evening sending restaurants and bars into a tizzy. While some restaurant owners did not received the official notification, others said complained to their association that they received the notification on whatsapp and were unsure of its legitimacy. Based on information received from its members, the Hotel and Restaurant Association Western India (HRAWI) then sought immediate clarification from the BMC and requested its withdrawal.

 

“We are glad that the BMC understood the kind of disorder such last minute notifications can cause to the restaurant industry and withdrew last evening’s notification restricting sale of liquor post 11:30 pm. We thank the Commissioner of the MCGM and the Principal Secretary Excise for expeditiously issuing a fresh notification withdrawing the restriction. The Hospitality industry has been struggling to stay afloat since the lockdown was implemented by the government. The earlier notification would have just compounded to the industry’s woes, but by withdrawing it swiftly, the government has instilled our faith back in it,” said Sherry Bhatia, President, HRAWI. 

 

Restaurant owners also questioned the logic of ban on liquor sales post 11.30 pm

 

 “How is that going to help control Corona numbers? Are we saying that Coronavirus gets activated between 11:30 pm to 1:30 am? The earlier circular was issued on a Friday evening. This would’ve effectively killed our weekend business. As it is, we are emerging from an unprecedented crisis. Weekday business is almost non-existent. Weekends are the only time we do any kind of business. Weekend business just helps us reduce our losses. To restrict operations at a time like this would be equivalent to killing us. Fortunately, the decision has been reversed and we are thankful to the government, and the BMC for it,” said a restaurateur who wished to remain anonymous.

Gurbaxish Singh Kohli, HRAWI spokesperson & Vice President, Federation of Hotel and Restaurant Association of India (FHRAI) said the notification issued at a short notice had caused chaos and there was little clarity if it was effective immediately or Friday night. He said notifications on whatsapp will open scope for malicious and fake notices and the government should stick to proper channels and grant adequate time for compliance. 

“We thank the BMC and Excise departments for understanding our predicament and for immediately acting on it and taking back an order which would’ve hurt an already ailing industry even further,” Kohli said. 

The restaurants and hotel industry had earlier expressed their anguish at the union budget 2020-21 not providing any relief to the industry trying to recover from the Corona lockdowns in a scenario where demand has been hit majorly. The budget speech apparently made no reference to the restaurants and tourism industry. The Federation of Hotel and Restaurant Association of India had written to Finance Minister Nirmala Sitharaman demanding the lowering of the present threshold from Rs 200 crore to Rs 25 crore per hotel for classification as infrastructure for hospitality projects. Lowering of the threshold would enable hotels to avail term loans at lower interest rates and have a longer repayment period.