COVID-19 to amplify house price surge: KPMG By Malavika Santhebennur 13 July 2021
Property prices are expected to surge higher by end-2023 than they would have without the COVID-19 crisis, according to KPMG.
Analysis by KPMG Economics has revealed that house prices are expected to be between 4 per cent and 12 per cent higher and unit values are expected to be up to 13 per cent higher than they would have been in the absence of the coronavirus pandemic.
The Australia’s Residential Property Market post-COVID-19 report found that Sydney led the differences in the prices in capital cities over the four years from December 2019 to December 2023 in COVID-19 and no-COVID-19 scenarios, with a predicted 25 per cent rise now, compared with what would have been a 13 per cent rise in a no-COVID-scenario.
Sales of residential properties across eight major cities grew 44 per cent in the January-March period this year to nearly 72,000 units as demand recovered, according to Knight Frank India. Mumbai Metropolitan Region (MMR) and Pune performed well on the back of the Maharashtra government s decision to reduce stamp duty. 71,963 units were sold during Q1 2021, 44 per cent more than in Q1 2020. This healthy growth in sales also encouraged developers to launch new projects which are reflected in the 76,006 units launched during the quarter, substantial growth of 38 per cent year-on-year, Knight Frank India said in a statement. As per the data of sales bookings in primary residential markets of eight major cities, housing sales in Mumbai rose 49 per cent year-on-year to 23,752 units in January-March 2021.
Synopsis
Property markets of Mumbai and Pune have led the table in both launches as well as sales on account of significant regulatory impetus in the form of discounts in stamp duty charges that led to significant improvement in sales velocity.
The increasing sales volumes have arrested the intensity of the on-year fall in residential prices of most markets.
Residential property markets across top 8 cities in India have witnessed a steady rise in both sales and launches in the first quarter ending March led by lower interest rates, discounts offered by developers and government sops including stamp duty reduction in key markets.
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Housing sales in volume terms is likely to decline 34 per cent this fiscal because of the COVID-19 pandemic but demand is expected to rise in 2021-22 from a weak base, according to India Ratings and Research. The agency expects the residential real estate sector to stage a sharp K-shaped recovery in the next financial year. The overall floor space sold is likely to increase by 30 per cent YoY (year-on-year) in FY22 after a 34 per cent YoY decline in FY21, it said in a statement. The agency emphasised that the overall sales in FY22 could still be around 14 per cent below FY20 level.