–          Hyderabad, Chennai witness maximum rise in searches followed by Delhi & Kolkata

–          Strong demand for smaller size 1&2BHK and ready-to-move in apartments

–          NCR witnesses fall in supply, Delhi leads by 3%

MUMBAI, APRIL 21, 2020 (GPN): The outbreak of COVID-19 has taken a toll on India’ real estate as near-term property buying and renting decisions are likely to get deferred but the silver lining remained in consumer searches that witnessed a 5.3% growth during Q1 2020, revealed the latest edition of Magicbricks’ PropIndex.

Magicbricks’ PropIndex for the period ofJan-Feb-March 2020 period reported that amidst the Covid-19 scare, residential segment witnessed relatively less new supply as developers remained cautious in launching new projects due to limited off-take and tight liquidity during Q1, 2020.

The report states that overall supply represented by the number of listings onMagicbricks witnessed only a marginal decline of 1%. Projects with ready-to-move status remained favourable among buyers and demand was heavily tilted towards the smaller configuration of 1&2 BHKs across cities.

Commenting on the PropIndex, Sudhir Pai, CEO, Magicbricks, said, “The Government is taking stringent measures to contain the Covid-19 outbreak, but the long-term impact on property market is uncertain, and yet to be assessed. But it seems that the consumer interest has not tapered off. There is a pent-up demand for ready-to-move in properties as our data suggests that the 80% of searches are happening in this segment and the rest for under-construction.”

The southern cities of Hyderabad and Chennai witnessed the maximum increase in searches at 8.1% and 6.4% QoQ, respectively. Interestingly, Delhi and Kolkata also had more than 5% increase in consumer searches. In contrast, Pune, which also faced head winds in 2019, witnessed a heightened consumer interest, rising by 5.2% QoQ.

All cities in the National Capital Region (NCR) witnessed a fall in supply in Q12020, led by a 3% fall in Delhi. Mumbai Metropolitan Region (MMR), which showed signs of weakness in 2019, had its supply effected, falling in both Thane and Navi Mumbai.

Rise in demand and a slight fall in supply, led to marginal price increase in cities, where prices were stable in previous quarters, and stabilization in cities where prices were on a downward slope. Overall the Indian market grew by a marginal 3.6% YoY, driven by cities such as Hyderabad, Chennai and Ahmedabad.

According to PropIndex, the residential sector is primarily being driven by three critical factors:

1. The robust commercial market in the last few years in all three southern cities as well as Navi Mumbai, Thane, and Ahmedabad, resulted in sustained demand for mid-segment housing in the core areas of the city near employment hubs.
2. Infrastructure development- metro lines, bridges, underpass, highways, drive end user demand in peripheral areas in cities like- Hyderabad, Navi Mumbai, Chennai and Thane
3. The Credit Linked Subsidy Scheme(CLSS) under Pradhan Mantri Awas Yojana (PMAY) is pushing affordable and lower-mid segments demand in the outskirt locations of the cities like Bengaluru, Chennai, Thane, Noida and Kolkata

However, it will be interesting to see how these factors play out as the market recovers from the outbreak of COVID-19 and the ensuing national lockdown.

mAs things return to normalcy, Magicbricks Research foresees the next two years to be crucial for the residential segment, as most of the stuck projects are likely to get completed with the help of the Rs.250 billion bailout fund. At the same time, completion of major metro lines should ease connectivity between peripheral and commercial areas, opening the next phase of growth. At last, it’s imperative for the sector to withstand these testing times and come out more robust and well prepared, once the COVID-19 situation gets better. ENDS