Despite the deadly second wave of Covid-19 disrupting the normal life and affecting the demand in the months of April and May, signs of recovery for demand in residential real estate were visible in June with a pan-India price growth of 1.7% during the quarter, according to the latest Magicbricks PropIndex Q2 (April-May-June) 2021. Notwithstanding the slump during April and May, the demand for housing in June’21 rebounded to the March’21 levels.
According to the report, the intermittent lockdown due to the second wave and the continuance of Work-From-Home (WFH) policies ensured a rise in demand for 3BHKs and above as home buyers are looking to upgrade for the need of an extra room to suit the requirement of home-office.
This shift has led to the rise in demand share of 3BHKs and higher configurations in Delhi-NCR, Hyderabad, and Kolkata, reaching an all-time high of more than 65% of the overall demand share in all these markets.
Unlike the first wave, the recovery in demand for residential real estate has been faster in the second wave. The residential markets of Bengaluru, Chennai, Thane, Noida-Greater Noida, Kolkata, and Delhi witnessed price corrections ranging from 1%-2.3% during the quarter. This rise in price reflects the inherent strength of the housing sector even during these troubled times. The quarter also witnessed a rise in supply across pan-India by almost 8% due to new launches, with Hyderabad seeing a maximum jump of 20%.
The maximum impact of the crisis was seen for the middle and low-income buyers who usually look for smaller houses with lower configurations. However, most premium, and high-income buyers were relatively less impacted by the crisis in terms of the money flow. This trend has led to the fall in demand for lower configuration, while the demand for bigger houses persisted during Q2 2021.
According to the PropIndex, the momentum gained in the last six months will continue across both supply and demand, especially due to the emerging needs of consumers for large size houses and all-time low interest rates. However, caution is required given the resurgence of Covid cases in the country and threats of another streak of lockdowns. The future of the sector is tied to speedy vaccine drives and completion of infrastructure projects like the metro and major highway projects.