Realty projects sell out in days over low interest rate, IT hiring
Record low home loan interest rates, strong hiring and salary growth in the IT sector have led to developers advancing launches to August-september 2021, successfully.
New project launches by top developers, including Godrej Properties and Prestige Estates, have seen record sales within days. Godrej Properties sold a record ~580-crore residential apartments in first day of its launch of forest-themed Godrej Woods project in Noida earlier this week.
Godrej Properties said it had sold 340 houses having an area of more than half a million square feet on the first day of its launch, making this one of the most successful launches in the country in recent times. Bengalurubased Prestige Estates sold out over 800 plots spread over 1.7 million sq ft within two days of the launch of its “The Great Acres” project in Sarjapur last month.
Another Bengaluru-based developer Brigade Enterprises has launched 12 projects across 4 million sqft in August 2021, including new phases in existing projects, at its virtual Brigade Showcase event in Bengaluru, Hyderabad and Chennai, ICICI Securities said in a report on Wednesday. It said the company had been able to clock monthly sales of over ~400 crore each in August and
September 2021.
ICICI Securities said Mahindra Lifespaces’ recent Happinest launch in Chennai saw sales of over 200 units with an average ticket size of ~40 lakh within a month of its launch.
Adhidev Chattopadhyay, vice-president at ICICI Securities, said initially, the target was to launch residential projects from October 2021 to coincide with the beginning of the festive season. But the waning of the second Covid wave, record low mortgage rates and strong hiring/salary growth in the IT/ITES sector have led to developers advancing launches.
“We expect the momentum to be carried forward into Q3FY22 (which will coincide with Dusshera and Diwali) and expect developers to post record sales booking numbers in H2FY22, led by new launches. We estimate the panindian residential market share for our coverage universe to grow from 25 per cent in FY21 to 29 per cent in FY24,” he said. He said owing to healthy balance sheets, access to capital and many unlisted, weaker developers being shunted out of the market, the market share of large and organised developers will grow further in 2-3 years.
Anuj Puri, chairman, Anarock Property Consultants, said, “It comes as no surprise that there are high sales in certain projects of leading and listed developers on the very first day of their launch. After the structural changes (note ban, RERA, GST etc.), dominance of leading and listed players have consistently risen amid changing consumer preferences. Covid-19 has accelerated this shift,” he said. According to Anarock Research, of the total sales of 203,000 units in the top-seven cities in FY17, the share of top-eight listed players was 6 per cent and that of leading unlisted players was 11 per cent, while the remaining was of unorganised players.
In FY21, of the total 158,000 units sold, the share of top-eight listed developers stood at 22 per cent, leading unlisted players share was 18 per cent while that of others was just 60 per cent.
Reflecting the buoyancy in the sector, BSE Realty Index rose for the second day in a row, ending at 3,936, about 8.7 per cent higher than Wednesday. Stocks of Oberoi Realty, Godrej Properties and DLF were major gainers.