• Locations like Manikonda, Kondapur, Puppalaguda and Narsingi in the Western Suburbs submarket saw more attraction
• Inventory levels were low, especially in ready to move in projects
• Total sales touched 2,122 units in Q3, up 76%
• Sales expected to improve further on return to normalcy
• Capital values have remained stable across all submarkets in the city

Hyderabad, October 18, 2020 (GPN): Hyderabad dominated new launches accounting for more than 40% of the overall launches (across all 7 cities under review) during Q3 2020, according to JLL Research. The city witnessed a 7% growth in new launches in Q3 as compared to Q2 this year. With new launches concentrated in the Kondapur, Hafeezpet and Manikonda regions, Western Suburbs continued to account for a majority share in new launches. Apart from Western suburbs, L. B. Nagar and Kompally in the Northern and Eastern Suburbs submarkets witnessed an increase in launch activity.

Most new launches were in the 3 BHK configuration and development activity was concentrated in the INR 0.75  to 1.0 crore price segment which contributed 59% of the total new launches during the quarter.

	Q2 2020	Q3 2020	Growth (%)Q3 2020 over Q2 2020
Launches (units)	5034	5396	7 %
Sales (units)	1207	2122	76 %
Average prices (INR /sq ft)	5333	5333	–

Source:  Real Estate Intelligence Service (JLL), 2020, JLL Research

“Low inventory levels, especially in ready to move in projects have provided developers with the lever to maintain prices. With sales expected improve further on return to normalcy, capital values have remained stable across all the submarkets in the city, said Sandip Patnaik , Managing Director – Hyderabad, JLL India. “Sales traction was witnessed more in ready to move in projects or projects likely to complete in the next 2-3 quarters. In the subsequent quarters, the translation of demand into sales will primarily hinge on enhanced consumer confidence, which in turn depends upon the continued implementation of progressive government policies amidst the gradual revival of the Indian economy at large”, he added.

Residential market in India, on road to recovery with strong sales

India’s residential market was more active in Q3 2020 with sales increasing by 34% versus Q2 2020. Mumbai accounted for 29% of the total sales in the quarter, while 22% of sales was contributed by Delhi NCR. Growth in sales activity was also driven by stronger demand in Chennai, Hyderabad and Pune. Residential market activity is also being supported by renewed interest from NRIs in Q3 2020,  resulting in more pent up demand in the market and increased enquiries received by developers.

Sales volumes increased across markets

City	Q2 2020 (in units)	Q3 2020 (in units)	Growth (%) – Q3 2020 over Q2 2020
Bengaluru	1,977	1,742	-12%
Chennai	460	1,570	241%
Delhi NCR	2,250	3,112	38%
Hyderabad	1,207	2,122	76%
Kolkata	481	390	-19%
Mumbai	3,527	4,135	17%
Pune	851	1,344	58%
Total	10,753	14,415	34%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

Residential market activity all over India, is also being supported by renewed interest from NRIs in Q3 2020, resulting in more pent up demand in the market and increased enquiries received by developers.

“The further easing of lockdown restrictions and the upcoming festive season might help in bringing buyers back to the market. An assessment of years to sell reveals that the expected time to liquidate stock has increased from 3.6 years in Q2 2020 to 4 years in Q3 2020. While the residential space remains unpredictable, favourable supply dynamics could deliver potential upside for both homebuyers and developers in the medium-term,” said, Dr.Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.

Focus on mid and affordable segment continues

New launches were restricted with 12,654 units launched in the third quarter, a decline of 14% quarter-on-quarter. Developers focused on completion of under construction projects and clearing their existing inventory. Hyderabad and Mumbai accounted for over 60% of the total new launches in the quarter. The drop in new launches was driven by Bengaluru, which witnessed a substantial decline of over 80% as compared to Q2 2020. Development focus on mid and affordable segments continued in Q3 2020 with nearly 75% of the new launches in the sub INR 1 crore category. Moving ahead, the focus on these price segments is expected to continue with developers focusing to reap the benefits of strong pent up demand.

City	Q2 2020 (in units)	Q3 2020 (in units)	Growth (%) – Q3 2020 over Q2 2020
Bengaluru	6,135	1,074	-82%
Chennai	182	1,487	717%
Delhi NCR	Negligible	699	–
Hyderabad	5,034	5,396	7%
Kolkata	Negligible	Negligible	–
Mumbai	2,294	2,242	-2%
Pune	1,135	1,756	55%
Total	14,780	12,654	-14%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

Unsold inventory dips across the country

Q3 2020 witnessed sales outpacing new launches as unsold inventory across the seven markets (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata ) decreased marginally from 459,378 to 457,427 units. Mumbai and Delhi NCR together account for more than 50% of the unsold stock which are at various stages of construction.

	Q2 2020 (in units)	Q3 2020 (in units)	Growth (%) – Q3 2020 over Q2 2020
Aggregate (7 cities)	459,378	457,427	-0.4%

Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

Over the last few years, residential prices in most markets have remained stagnant. Developers have been operating with low margins and the chances of a significant reduction in prices is unlikely. In Q3 2020, prices remained largely stable across all the seven markets when compared to the previous quarter. However, it is important to note that developers in certain markets are providing moderate price discounts to kickstart sales, thereby facilitating cash flows to tide over the crisis in the short term. Moreover, developers are offering flexible payment schemes such as no EMIs for a year and other schemes to attract prospective homebuyers who pressed ‘pause’ in the last few months. This could be the first signs of a broader recovery of the residential market in the country.

NOTE: *The comparison pertains to only last two quarters since the current crisis has no parallel and has infused uncertainty which we have not witnessed in the past decades. ENDS