According to PropEquity, total housing sales during April-June 2020 stood at 21,294 units, down 67 per cent from 64,378 units in the year-ago period. Barring Noida, all other eight cities witnessed a decline in sales.
Net absorption of commercial real estate across top 8 cities declined over 73% from a year ago and 49.5% on-quarter to 3.72 million sq ft during the quarter as fresh transaction activity remained muted, showed data from Cushman & Wakefield.
Properties in Malad-Kandivali are priced between Rs 11,600 per sq ft and Rs 20,100 per sq ft. A 1-BHK (610 sq ft) costs an average of Rs 89 lakh and a 4-BHK (2,500 sq ft) costs approximately Rs 4.3 crore.
More property sales were recorded in May, when some lockdown measures were eased, but the total number of registrations in Delhi-NCR stood at 85% below the level in the year-ago month. In Ghaziabad, registrations were down by 93%.
"What has happened is that the pandemic has opened up a lot of opportunities for developers and the people. Customers have understood the necessity of a home and for developers it has opened up, if not luxury, budget segment residences", Akshaya Homes Ltd founder T Chitty Babu told.
According to registration data available for 275 projects, around 70% have witnessed a decline in the last two months of May and June from average prices in 2019-20, showed a study by data analytics firm Propstack.
On their opinion of real estate as an asset class post Covid-19, UHNIs said that pricing will become more reasonable. According to developers offering super luxury flats, enquires in May increased as initial days of lockdown made owner feel the need of bigger home.
Launched after 2013, many of these projects were in the final leg of completion. With almost zero construction activity in the last few months due to the lockdown, the completion deadlines for almost all these projects have been extended.
Real estate developers and property brokerage firms are adopting digital mode for sales and marketing but prospective homebuyers are cautious due to uncertainties. The builders have not reduced the basic selling prices, but they are sweetening the deal for serious buyers through discounts and attractive payment plans.
A bench of Chief Justice D N Patel and Justice Prateek Jalan noted that the court will be “extremely slow to interfere in contractual terms” between landlords and tenants, adding that waiver of rent cannot be granted by the court.
The resultant pressure on developers to sell may trigger a 5-10% price reduction across segments, said property consultant Cushman & Wakefield. These discounts could be in the form of minimal booking amount that is fully refundable with no cancellation or various subventions, financial and price protection offers.
“We came out with 'Lockdown offer' for our commercial as well as residential projects where we asked the buyer to pay Rs one lakh to book as against the full booking amount, the rest of the amount could be paid within the 100 days,” Manoj Gaur, MD, Gaurs Group.
The new agreements are being drafted for both residential and commercial properties as both -- property owners and tenants -- seek clarity in case of another lockdown disrupting life. The lockdown clause has gained importance as force majeure clause.
According to ‘concerned yet positive – The Indian Real Estate Consumer (April – May 2020)’ report, real estate (35%) is still perceived as the preferred mode of investment, followed by gold (28%); fixed deposits (22%), stocks (16%).
Both Haryana and UP RERA, which cover the maximum number of ongoing real estate projects in NCR towns, have opted for virtual hearings post Covid-19, while Delhi is launching a trial run before taking a decision.
“Longer term projects are likely to remain under stress though. About one-fifth of end-users (21%) may return to the market in 6-12 months, as per the sentiment during May. End-users as well as investors are likely to show a higher preference for smart homes and integrated townships in the post-COVID world,” Savills India said in the report.
Though demand for office space will come down, it is not expected to crash. Many employers will need to scale up the usable area for each employee. There could also be an uptick in demand for bigger, more flexible houses.
The estimated cost of completion of all Amrapali projects is about Rs 8,500 crore, and NBCC, with the support of the apex court, has handed over two stalled projects. Execution work at eight more projects housing 12,169 units valued at Rs 618.08 crore, is ongoing.
The Rail Land Development Authority (RLDA) will pick a private developer to build bungalows and pricey three-storey apartment blocks on a 5.38 hectare plot. Currently the area, on Boulevard Road, adjacent to Tis Hazari Metro station near Rajpur Road, is home to ten railway bungalows that will be demolished.
Developers feel that the criteria of Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects or SWAMIH fund is difficult to meet, resulting in a last mile funding constraint.
“We are primarily against the interest being charged on installments, which also includes interest. This will affect consumers adversely at a time when they are already facing financial difficulties,” said Shirish Deshpande, chairman of Mumbai Grahak Panchayat.
Sales were already weak when the lockdown was clamped, affecting walk-ins in April and causing postponement of purchasing discussions that were at advanced stages. Construction activity and new launches had come to a complete halt in March and April.
Earlier, RBI had informed the court that its instructions do not come in the way of releasing home buyers' loans whose accounts are Non-Performing Assets (NPA) and it was for the banks and other financial institutions to release the loan.