Hyderabad records highest new residential launches in Q3 2020; contributes 40% to overall launches: JLL

Bengaluru: Hyderabad dominated new launches, accounting for more than 40% of total launches (across all 7 cities under review) during the Q3 2020, according to JLL research.

The city witnessed a 7% growth in new launches in the third quarter compared to the second quarter this year. With the new launches concentrated in the Kondapur, Hafeezpet, and Manikonda districts, the western suburbs continued to have a majority stake in the new launches. Outside of the western suburbs, the L.B Nagar and Kompally markets in the northern and eastern suburbs have seen an increase in launch activity.

Most of the new launches were in the 3 BHK configuration and development activity focused on the INR 0.75-1.0 crore price segment, which contributed 59% of 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 to improve further on return to normalcy, capital values have remained stable across all the sub-markets in the city, said Sandip Patnaik, Managing Director – Hyderabad, JLL India. Higher sales have been observed in the event that they are ready to move in projects or projects likely to be completed in the next two to three months. In the coming quarters, he added, translating demand into sales will mainly depend on boosting consumer confidence, which in turn depends on the continued implementation of progressive government policies amid the gradual recovery of the Indian economy as a whole.

Hyderabad residential sales

According to JLL, India’s residential market was more active in the third quarter of 2020, as sales increased by 34% compared to the second quarter of 2020. Mumbai accounted for 29% of total sales in the quarter, while Delhi NCR contributed 22% of sales. The growth in sales activity was also driven by strong demand in Chennai, Hyderabad, and Pune. Residential market activity is also supported by renewed interest from NRIs in Q3 2020, which has resulted in increased pent-up demand in the market and an increase in inquiries 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


Further easing of lockdown restrictions and the upcoming festive season may help get shoppers back on the market. The sales year's assessment reveals that the expected time to clean inventory has increased from 3.6 years in the second quarter of 2020 to 4 years in the third quarter of 2020. While residential space remains unpredictable, favorable supply dynamics could generate a potential raise for each. From medium-term home buyers and developers,” said Dr. Samantak Das, Chief Economist and Head of Research, REIS, India, JLL.

The sport mentioned that new launches were limited to 12,654 units launched in the third quarter, down 14% from the previous quarter in the core market. The developers focused on completing projects under construction and liquidating their existing stock. Hyderabad and Mumbai accounted for more than 60% of all new launches in the quarter.

“The decline in new launches was driven by Bengaluru, which experienced a significant drop of more than 80% compared to the second quarter of 2020. The focus on development in affordable and mid-range sectors continued in the third quarter of 2020 with approximately 75% discount New releases are in the INR 1 crore category. Moving forward, the focus is expected to continue on these price segments as developers focus on reaping 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 also declined nationwide. In the third quarter of 2020, sales outpaced new launches as unsold inventory in all seven markets (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune, and Kolkata) decreased slightly from 459,378 to 457,427 units. Mumbai and Delhi NCR together account for more than 50% of unsold inventory at various stages of construction.

Q2 2020 (in units)

Q3 2020 (in units)

Growth (%) – Q3 2020 over Q2 2020

Aggregate (7 cities)

4,59,378

4,57,427

-0.40%

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