According to a report by ICRA, the residential real estate segment has witnessed a sharp recovery in Q2 FY2021, post a steep decline in Q1 FY2021. The credit rating agency also said that Mumbai Metropolitan Region (MMR), Pune, and National Capital Region (NCR) were the highest contributors to pan-India sales in the said quarter.
Despite the sales growth bouncing back considerably with a Q-o-Q growth of 60% in the second quarter, overall housing sales volume witnessed a Y-o-Y decline of 50% in first half across the top eight cities of the country.
Home buyers preferred completed projects or those in advanced stage of completion post lockdown relaxation. While quarterly average sales for under-construction units registered a decline of 78% during H1 FY2021, a significantly lower decline of 29% was noted for advanced stage/completed projects. Further, larger format units seemed to be finding increasing favour, possibly due to the requirement for dedicated work and study areas.
ICRA had earlier expected a 45% overall decline in sales volumes in FY21. However, post the lows in Q1 FY21, sales across the top eight cities of India rebounded in Q2 FY21, indicating some green shoots of recovery. With some further recovery expected in H2, it is revising its earlier estimate of sales volume decline in FY21 to 35-40%.
The uptick in absorption levels during Q2 FY2021 has also been driven by the affordable and mid/upper-mid segments, indicating the higher resilience of these segments to the demand headwinds currently prevailing in the residential realty market.