Home sales increase in January-March quarter amid stamp duty, home loan rate cuts

Home sales in India's eight prime residential markets are showing a quarterly increase of 12 per cent in the January-March quarter
Home sales increase in January-March quarter amid stamp duty, home loan rate cuts
Representative imageImage source: Pixabay

Mumbai: Various measures taken by the Centre as well as by several state governments to boost buyer confidence have started to show positive outcomes, with home sales in India's eight prime residential markets showing a quarterly increase of 12 per cent in the January-March quarter (Q1) of CY (Calendar Year) 2021 compared to Oct-Dec qtr of 2020, shows a recent report by online property brokerage firm PropTiger.com.

According to Real Insight – Q1CY21, builders sold a total of 66,176 homes in the primary market in the January-March quarter of 2021, a time marked with several state governments, including Maharashtra and Delhi, announcing stamp duty and circle rate reductions to boost buyer sentiment and by effect housing sales.

When compared to Q1CY20, however, home sales in the markets covered in the analysis showed a decline of 5 per cent from 69,555 units, something that can be termed marginal, considering that the January-March period in 2020 was the last quarter before the pandemic spread started in India, forcing the government to announce a nation-wide lockdown late in March 2020 that brought economic activity in the country to a standstill.

“As the economy gradually marches towards recovery, as reflected in global rating agencies and think-tanks revising India’s growth forecasts for 2021 and 2022, the residential real estate market in the country is also seeing a positive momentum on the back of various measures taken by the centre and state governments, the RBI and the entire banking system (as demonstrated in home loan rate reductions). This positive change is visible in the first quarter through an increase in supply numbers, an indication that developers are more comfortable now with regard to liquidity support and buyer sentiment," said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com.

"Metrics on the demand side have also been largely stable with the job market opening up again in various industries, giving people the confidence to take advantage of a property market that is at its most affordable for home buyers in years," he added.

PRICES STABLE

As expected, no extraordinary upwards movement was seen in average prices of property in the primary or new homes market. While annual growth remained largely flat or in low single digits in most markets, Ahmedabad and Hyderabad stood out, with 5 per cent annual growth in average rates of property.

“The Maharashtra government’s decision to temporarily lower stamp duty on property registrations helped mitigate the steep decline in sales for the Mumbai and Pune markets that contribute the most to the national stock of unsold homes. The state government should have continued with the benefit of reduced rates to keep the sales momentum going. We also expect states like UP and Haryana to announce stamp duty and circle rate reductions in order to provide support to crucial housing markets of Noida and Gurugram in the national capital region,” said Mani Rangarajan, Group COO, Housing.com, Makaan.com and Proptiger.com.

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