Bengaluru sees resurgence in housing sales in Q4

In a sign of recovery for the real estate sector, Bengaluru has seen a 32% quarter-on-quarter jump in sales with 6,490 residential units being sold during the December quarter.

The availability of ready-to-move-in houses with better amenities to work from home, historically low level of interest rates and a marginal dip in property prices aided the recovery in sales.

During the second half of the year (July to December), the city recorded residential sales of 11,402 units, and 23,576 units in the entire calendar year 2020. South Bengaluru saw the highest quantum of homes sold in the second half (3,860 units) followed by East Bengaluru (3,750). South Bengaluru also registered maximum home launches at 3,740 units during the period, according to data shared by global property consultant Knight Frank.

"With consumer preferences shifting towards ready-to-move-in houses, developers have restrained new project launches this year and reoriented operational and financial bandwidth towards completion of ongoing projects," Shantanu Mazumder, Senior Branch Director, Knight Frank India, said.

In the December quarter, 61,593 residential units were sold across top eight cities, showing a growth of 84% over the September quarter.

Among other cities, Mumbai and Pune markets led the revival with both sales as well as new launches recovering significantly in the second half of the year. While all-India residential sales saw a quarter-on-quarter (QoQ) rise of 84%, Mumbai (193%) and Pune (143%) recorded higher than average QoQ growth. This was mainly due to reduction in stamp duty by the Maharashtra government by 300 basis points for a limited period between September and December, making home-buying attractive.

Sales in the category of Rs 50 lakh and above constituted 57% of all sales in the second half, showing a growth trend. Buyers in the affordable category were far more impacted by pandemic-induced economic uncertainties, the Knight Frank report said.

In Bengaluru, as a result of a decline in new launches and demand for ready-to-move-in homes, the unsold inventory level has declined by 5% to 74,764 units at the end of 2020.

On a year-on-year basis, Bengaluru witnessed 54% decline in sales. In the December quarter of 2019, the sales stood at 10,828 units.

Prices dip marginally

During 2020, the prices of residential units saw a marginal dip of 1% and the weighted average house price was recorded at Rs 4,935 per square feet.

“Multi-decade low home loan interest rate and relatively affordable price dynamics in the Bengaluru market have helped the cause of demand revival even during Covid-19 crisis," Mazumder said.