Incomplete residential apartments in Greater Noida, near New Delhi: AFP

India’s residential market showed an uptick in sales during the July-September quarter, while average housing prices fell in many cities.

According to real estate consulting firm Knight Frank India, housing sales in the July-September quarter stood at 33,403 units, 3.5 times more than the 9,632 units recorded in the April-June quarter. New home launches in the top eight cities rose five-fold to 31,106 units in the July-September quarter, compared with 5,584 units in the preceding quarter.

The consulting firm’s data shows that five out of the eight cities had recovered more than half of the lost ground, in terms of sales, with Kolkata and Chennai showing higher growth compared with the quarterly average in 2019.

Real estate developers offered attractive promotions and freebies to clear inventories, and adopted digital tools to engage with customers. The acute labor crunch experienced in the earlier part of the lockdown also eased as laborers began returning to work.

The fall in home loan interest rates also encouraged more customers to consider buying a house. The recent decision by the Maharashtra state government to slash stamp duty, the transaction tax collected by the government on property purchases, on a temporary basis has helped increase home sales in Mumbai and Pune.

However, the number of home sales and new launches remain substantially low when compared with the year-ago quarter. The total residential sales of the top eight markets during July-September quarter this year was 54% of the number recorded in the 2019 quarter. Similarly, the number of residential launches was 56% of the 2019 quarterly average.

The average housing prices declined by 2-7% year-on-year during July-September in Delhi, Mumbai, Chennai, Pune, Kolkata, and Ahmedabad on lower demand amid the Covid-19 pandemic. But Bangalore and Hyderabad bucked the trend – prices increased 3% and 4%, respectively, when compared with the year-ago period.

Office space

The office space market in India also showed recovery this quarter, following the easing of lockdowns and the reopening of some offices. Office leasing across India’s top eight cities in the July-September quarter surged 80% over the April-June quarter, while new office completion during the same period soared 126% sequentially.

The total office transactions of the eight markets in the third quarter of 2020 have improved and reached 33% of the 2019 quarterly average level. Chennai, Delhi and Mumbai recorded higher recovery in the September quarter with transactions reaching the level of 57%, 43% and 42%, respectively, of the 2019 quarterly average.