Housing Market Trends 2021
Q1 2021 summary
Residential real estate sales in Bengaluru picked up drastically in the last quarter of 2020 with the lifting of the lockdown. High preference on ready-to-move-in homes amongst customers led to decline in the inventory of such properties. In Bengaluru, ~3700 new units were launched in this quarter clocking 5% growth (q-o-q). For new launches, mid segment housing dominated with 77% sales, while high end housing segment registered a share of 14%. Within the city limits, large sized apartments like 3&4 BHK continues to dominate with 55% share in new product type.
Future outlook and impact of lockdown
With the onset of second wave of pandemic, increased sense of fear amongst the customer, and further lockdown restrictions by end of Apr 21, decelerated the sales, the effect of which shall continue in the coming few months. For the subsequent quarters, one can preempt sustainable demand in ready-to-move-in affordable and mid housing segments. Low interest rates, stable property prices and increased demand are all catalysts for these two segments. Due to the Work-From-Home practice, we will also see a shift away from city-based residences to gated communities/apartments and villas in off-beat locations as most of them are less populated while offering larger homes and spaciousness while retaining a similar price range when compared to inside city center.
According to Anarock Property Consultants for 2023, housing sales for will be estimated to cross 3.17 lakh units, fresh launches of 2.62 lakh units and the drive for sales will be driven by digital marketing. Of the top 7 cities, Mumbai Metropolitan Region and Bangalore will be the top two emerging cities in 2023 given the performance and drive in sales and new launches despite the pandemic in 2020-2021.
As per Anarock MMR is likely to constitute 28% share of the total sales with 30% of new launches and Bangalore is likely to constitute 20% share of homes sold and 17% new launches.
NCR is 18% and 15% respectively followed by Pune of almost 15% and and 18% respectively
Kolkata, Chennai and Hyderabad approximate 6% and 8%.
The ongoing pattern of sales exceeding supply is likely to continue and 2021 is expected to witness an increase of 35% in housing launches and a 30% increase in sales over the previous year. However, against the peak year of 2019, supply and sales may be lower by 28% and 31% respectively.
That being said 2021 is going to be much better against 2020 however barely reaching the levels of 2019.
The current housing market trends remain buoyant owing to factors like interest rates, an overall improvement on the job market, resumed economic activity and sustained stock market growth, various government interventions to combat the pandemic’s deleterious effects, and an increasing desire to own a home during a time of uncertainty.
Professionally Managed Student Accommodation (PMSA) is a relatively new and unconventional asset class that is specifically targeted at the student community, particularly in the higher education sector. As universities and colleges have had their enrolments grown, specific cities have emerged as major education centers. With the number of migrant students increasing, there is a greater demand for student accommodation facilities. While colleges and universities have a ready stock of hostel accommodation, it is definitely proving to be inadequate. With the core function of education institutes focused on providing quality education, student accommodation facilities are largely basic in nature like a room with a bed, study table and chair and wardrobe. Washing room, toilets and dining facilities are common. But then again no two student accommodations are alike as they differ in terms of pricing, user expectations and targeted student segments while maintaining a hostel like atmosphere intact that means strict timings and vigilance on students and doing away with privacy.
At a time, when demand for student accommodation facilities is rising along with a focus on providing better livability, the role of private operators assumes great significance. The advent of private players is also crucial as this is a relatively new asset class albeit one with superior revenue potential and client retention and stick ability. These private players are bringing in better amenities, fulfilling the student accommodation deficit, utilizing technology to create a seamless community-driven living experience and also helping create a community-feel and experience for the users.
