Real estate searches grew by 5.3% in Q1 2020 amid COVID-19 outbreak: Magicbricks report

New Delhi: India’s Real estate is witnessing a slump in property buying and renting decisions amid coronavirus COVID-19 outbreak but consumer searches have shown a growth of 5.3% during Q1 2020, according to the latest edition of Magicbricks’ PropIndex.

Magicbricks’ PropIndex for the period of Jan-Feb-March 2020 period reported that amidst the COVID-19 scare, the residential segment witnessed relatively less new supply as developers remained cautious in launching new projects due to limited off-take and tight liquidity during Q1, 2020.

Overall supply represented by the number of listings on Magicbricks witnessed only a marginal decline of 1%. Projects with ready-to-move status remained favourable among buyers and demand was heavily tilted towards the smaller configuration of one and two BHKs across cities, the report said.

On the PropIndex report, Sudhir Pai, CEO, Magicbricks, said, “The government is taking stringent measures to contain the COVID-19 outbreak, but the long-term impact on the property market is uncertain, and yet to be assessed. But it seems that the consumer interest has not tapered off. There is a pent-up demand for ready-to-move-in properties as our data suggests that 80% of searches are happening in this segment and the rest for under-construction.”

The report said that Hyderabad and Chennai witnessed the maximum increase in searches at 8.1% and 6.4% QoQ, respectively, while Delhi and Kolkata also saw over 5% increase in consumer searches. In contrast, Pune, which also faced headwinds in 2019, witnessed a heightened consumer interest, rising by 5.2% QoQ.

In the National Capital Region (NCR), all cities witnessed a fall in supply in Q12020, led by a 3% fall in Delhi. 

The residential sector is primarily being driven by three critical factors:

1. The robust commercial market in the last few years in all three southern cities as well as Navi Mumbai, Thane, and Ahmedabad, resulted in sustained demand for mid-segment housing in the core areas of the city near employment hubs.

2. Infrastructure development- metro lines, bridges, underpass, highways, drive end-user demand in peripheral areas in cities like- Hyderabad, Navi Mumbai, Chennai, and Thane

3. The Credit Linked Subsidy Scheme(CLSS) under Pradhan Mantri Awas Yojana (PMAY) is pushing affordable and lower-mid segments demand in the outskirt locations of the cities like Bengaluru, Chennai, Thane, Noida and Kolkata

It will be interesting to see how these factors play out as the market recovers from the outbreak of COVID-19 and the ensuing national lockdown.

Magicbricks Research, however, foresees the next two years to be crucial for the residential segment, as most of the stuck projects are likely to get completed with the help of the Rs 250 billion bailout fund. 

Further, completion of major metro lines should ease connectivity between peripheral and commercial areas, opening the next phase of growth. At last, it’s imperative for the sector to withstand these testing times and come out more robust and well prepared, once the COVID-19 situation gets better, said Magicbricks.