Notwithstanding the devastating 2nd wave of COVID-19, Indian residential real estate staged a convincing comeback in 2021. ANAROCK data reveals that approx. 2.37 lakh units were launched across the top 7 cities during the year, touching the pre-COVID levels of 2019s. Yearly, new launches rose by 85% in 2021 over 2020.

Housing sales rose 71% Y-o-Y in 2021 with approx. 2.37 lakh units sold, thus reaching 90% of pre-COVID 2019 levels. MMR recorded the highest sales at 76,400 units, followed by NCR with approx. 40,050 units sold.

Of approx. 2.37 lakh units launched in 2021, the mid-segment (INR 40 lakh to INR 80 lakh) had the maximum share with 39%, followed by the affordable segment (priced under INR 40 lakh) with a 26% share. The premium segment (priced between INR 80 lakh to INR 1.5 Cr) had a 25% share.

Anuj Puri, Chairman – ANAROCK Group, says, “Despite the pandemic, 2021 was a fantastic year for the Indian housing sector. More or less an equal number of homes were launched and sold. The fact that launches were back to pre-COVID levels is very significant, and housing sales fell short of 2019 by a mere 10%. Of the four quarters, Q4 2021 was by far the best, with housing sales in the top 7 cities attaining a new high of approx. 90,860 units in Q4 2021. This was the highest quarterly sales performance since 2015.”

A tremendous rise in homeownership aspirations was aptly supported by developer discounts and offers, government incentives like Maharashtra’s stamp duty cut, and lenders maintaining decadal-low interest rates.

“Extrapolating on the performance in 2021, 2022 will see very satisfactory growth as long as the coronavirus pandemic remains in check in India,” says Puri. “Various trends will shape the sector in 2022 – Grade A developers will corner more market share, and sales will come back to the pre-pandemic levels of 2019. However, input cost pressure and supply chain issues may induce a 5-8% increase in property prices. End-users will remain the dominant market force, and peripheral areas of the larger cities will continue to see both supply and demand traction.”

New Launch Overview: 2021 vs. 2020

Y-o-Y, the top 7 cities saw approx. 2,36,700 new units launched in the entire 2021, against 1,28,000 units in 2020 – a significant increase of 85%, which put new launches back on par with the pre-pandemic 2019 levels.

The key cities contributing to launches in 2021 were MMR (Mumbai Metropolitan Region), Hyderabad, Pune, and NCR – together accounting for 76% of supply additions:

• MMR saw approx. 56,880 units launched in 2021 – a significant rise of over 88% over 2020. Approx. 58% of the new supply was added in the sub-INR 80 lakh budget segment
• Hyderabad added approx. 51,470 units in 2021 – a yearly increase of 144% over 2020 and a 71% increase over pre-COVID 2019. Approx. 81% new supply was added in the mid-segment (INR 40 lakh to INR 80 lakh) and the premium segment (INR 80 lakh to INR 1.5 Cr budget range)
• NCR added 31,710 new units in 2021 compared to 18,530 units in 2020 – a significant rise of 71%. Approx. 52% of the new supply was added in the mid and premium segments
• Pune added 39,870 units in 2021, a massive jump of 67% over 2020. Approx. 57% of the new supply was added in the mid-segment
• Bengaluru added approx. 30,650 units in 2021, an increase of 43% over 2020. Approx. 72% of the new supply was added in the mid and premium segments
• Kolkata added approx. 13,750 units in 2021, a massive increase of 290% over 2020. Approx. 71% of the new supply was added in the affordable segment
• Chennai added approx. 12,370 units in 2021, an increase of 35% over 2020. Approx. 62% of the new supply was added in sub INR 80 lakh budget segments

Source: ANAROCK Research

Overall Sales Overview: 2021 vs. 2020

Altogether, the top 7 cities saw approx. 2,36,530 housing units sold in the whole of 2021, against 1,38,350 units in 2020 – a hefty increase of 71%.

• MMR saw maximum yearly sales of approx. 76,400 units among the top cities. City sales increased by 72% – from 44,320 units in 2020 to 76,400 units in 2021 (due to a significant increase of 88% in new launch supply)
• Hyderabad saw a huge 197% increase in sales – from 8,560 units in 2020 to 25,410 in 2021
• NCR saw sales increase by 73% – from 23,210 units in 2020 to 40,050 units in 2021
• Pune saw a significant sales increase of 53% – from 23,460 units in 2020 to 35,980 units in 2021
• Bengaluru saw sales increase by 33% – from 24,910 units in 2020 to 33,080 units in 2021
• Chennai saw a hefty 86% increase in sales – from 6,740 units in 2020 to 12,530 units in 2021
• Kolkata saw an 83% increase in sales – from 7,150 units in 2020 to 13,080 units in 2021

Source: ANAROCK Research

Housing Inventory Status – 2021-end:

Increased launches and overall absorption in the top 7 cities in 2021, when compared to 2020, resulted in minor changes in available inventory. However, compared to 2019, there has been a 2% reduction in available inventory by the end of 2021. Data indicates that the top 7 cities altogether have total unsold stock of approx. 6.38 lakh units as of 2021-end. Among the top 7 cities, MMR and NCR saw a yearly decline of 10% and 5%, respectively.

Price Movements

Average residential property prices across the top cities increased by 3-5% in 2021 compared to 2020. Bengaluru and MMR witnessed the highest price increase of 5%, while Chennai and Kolkata witnessed a 3% increase.

About the author- Anuj Puri, Chairman – ANAROCK Group