Share of top listed developers in housing sales rises to over 16% in FY21


These factors support healthy recovery in sales during H2 FY2022, with recovery aided to some extent by concessions on stamp duties and other incentives provided by certain state governments.

Homebuyers are increasingly turning to reputed and listed developers with an established record to purchase their dream home, resulting in the market share of the top nine listed developers growing to more than 16% in FY21 from just 6% in FY17, credit ratings agency Icra said on Thursday.

“Homebuyers have been leaning towards completed inventory and towards developers with an established track record of on-time and quality project completion,” the report said.

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The long-term trend of consolidation in the market, which has been a result of evolving consumer preferences and a sustained increase in market share of large developers among recent launches, is likely to continue, it said.

“Home enquiries have increased post June 2021, while the fundamental demand drivers remain intact with gradual pick-up in economic activity after the second wave and would serve as key enablers of the recovery of sales in the residential realty industry. As the larger developers resume their launch of new projects, which had been temporarily impacted in Q1 FY2022, their share of sales is expected to continue to improve within the overall residential real estate sales,” Icra assistant VP and sector head Kapil Banga said.

Icra said housing sales across the top eight cities fell 19% q-o-q to 68.5 million sq ft (MSF) in Q1 FY2022 due to the second wave of Covid-19 infections. The sequential drop comes on a high base of Q4 FY2021 (87.4 MSF), the second-highest sales since FY2012. However, residential sales more than doubled when compared to 33.7 MSF sales recorded in Q1 FY2021.

With increased focus on vaccination and quicker reopening of economy, unlike last year, sales are likely to recover to the earlier levels in the short-to-medium term. This is due to the fact that despite significant disruptions in Q1 FY2022, the underlying demand trend has remained intact, driven by factors like multi-year low interest rates, demand for more residential space on account of shift to hybrid working models and pent-up demand, the agency said.

These factors support healthy recovery in sales during H2 FY2022, with recovery aided to some extent by concessions on stamp duties and other incentives provided by certain state governments.

Banga said the impact of the second wave has been lower than the first wave, due to factors like many salaried employees continuing to work from home, localised lockdown restrictions and a higher degree of certainty regarding future income levels and stability.

“In particular, the IT-ITeS sector has witnessed robust financial performance with increased hiring, which supported the demand from employees in such sectors. The preference for bigger and better homes is also supporting second-home purchases which had remained low in the previous years. Though the second wave has dented the market following a good recovery curve in H2 FY2021, a similar recovery curve is expected in the second half of FY2022 as well,” he said.

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