Post-Pandemic Property Sales Recovery in Delhi

Delhi Feb 25, 2022

Property sales in Delhi recorded positive recovery trends in 2021 post the disruption caused by the Covid-19 pandemic. Even as the nation was hit by the second wave of the pandemic in early-2021, the real estate market in Delhi seemed better prepared as the declining impact in 2021 was lesser than the first wave impact in 2020. There has also been a rise in the market share of bigger property sales in 2021, compared to the previous years. At TEAL, we analyzed the property sales market in Delhi in the light of the  Covid-19 pandemic to track the sales activity during the period of 2019 - 2021.

TEAL is India’s largest repository of real estate data.  At TEAL, we leverage cutting-edge big data analytics and machine-learning to power our range of due diligence products and valuation tools. Our data repository covers title documents, municipal and litigation records, RERA registration details among other data points in Delhi-NCR, the Mumbai Metropolitan Region, Pune, Bangalore, Hyderabad, Warangal, Chennai, Coimbatore and other cities in Maharashtra.

Source: TEAL Data

The Covid-19 pandemic hit the nation in early 2020, disrupting the economy and the real estate market. To curb the spread of the pandemic, the Central Government took several measures and even announced a nation-wide lockdown from March 22, 2020 and extended it till the end of April [1]. During the period of April - June 2020 (Q2), property sales in Delhi recorded a 63.64% decline to Q1 2020. Zero transactions were recorded in April 2020 as the Sub-Registrar's Office (SRO) were closed due to the complete lockdown restrictions.

Post the pandemic slump in Q2 2020, the sales volume gradually increased in the second half of the year. Q4 2020 witnessed 34.4% higher property sales transactions than Q1 2020. However, the overall property sales volume in 2020 was 23.03% lower than in 2019.

Source: TEAL Data

Property sales volume in Delhi increased by 53.2% in 2021 compared to the sales volume in 2020. The property sales volume in 2021 was still higher than the pre-pandemic year of 2019 by 17.9%.

Government Assistance to Propel Real Estate Market Recovery

The first wave of the Covid-19 pandemic in April and May 2020 adversely impacted the real estate sector in Delhi with all time low monthly property sales transactions - both developers and homebuyers affected by liquidity shortage and unstable project delivery capabilities. Construction and sales activity came to a complete halt in the nation with the shutting down of Sub-Registrar's Offices (SROs) and homebuyers looking to save rather than spend amid the uncertainty of the pandemic.

To propel the real estate market recovery post the first wave of the pandemic, the Central and State governments introduced policy changes and tariff concessions. Some of the factors that contributed to the real estate recovery in Delhi in 2021:

  • The Reserve Bank of India (RBI) cut its reverse repo rate by 25 basis points to 4% to encourage banks to deploy excess funds within the system toward lending and help revive growth in the country [2].
  • Reduction in circle rate (also known as Ready Reckoner Rate/Guidance Value) by 20% as announced by the Delhi State Government on 5 February 2021, and was extended till the end of the year [3].
  • Pent up market demand and upswing in the job market.
  • Under Union Budget 2021-22, tax deduction up to Rs. 1.5 lakh (US$ 2069.89) on interest on housing loans, and tax holiday for affordable housing projects have been extended until the end of fiscal 2021-22 (March 2022) [4].

Resilient Property Sales Market during Second Wave - 2021

Q1 of 2021 enjoyed the forward momentum from the first wave recovery. With the beginning of 2021, the Delhi government slashed circle rates by 20% in February 2021 as a step to boost the economy post the first wave of the pandemic [3]. The momentum from Q1 2021 was disrupted by the second wave of the Covid-19 pandemic in April 2021. The real estate market, however, seemed better prepared to face the second wave as the declining impact in Q2 2021 was lesser than in Q2 2020. After registering a quarterly decline of 45.4% in Q2 2021, property sales in Delhi recovered by 131% in Q3 2021. The sales volume during October - December 2021 (Q4), however, registered a 9.7% decline from the previous quarter, but witnessed a 22.3% increase from Q4 2020. This drop in sales volume can also be partly attributed to the rise in Omicron cases in the state and the subsequent curfews [5].

Source: TEAL Data

The active measures taken by the Government in the form of reduced circle rate, subsidized housing schemes, and lower interest rates after the first wave in 2020 helped lessen the impact of the second wave and also enabled quicker recovery in 2021.

Rise in Sales Volume of Properties Above 1000 sqft in 2021

Source: TEAL Data

Delhi witnessed a rise in market share of bigger properties for sale in 2021. The sales volume of properties between 1000 - 2000 sqft and above 2000 sqft  increased by 2% and 1% respectively from the previous two years. 16% of the properties sold were between 1000 - 2000 sqft in 2021 - the market share for this category in 2019 and 2020 was 14%. The sale of properties less than 500 sqft decreased from a market share of 45% in 2020 to 42% in 2021.

West Delhi Records Maximum Property Sales Volume

Source: TEAL Data

Comparing the property sales in Delhi over the last 5 years, West Delhi recorded the highest property sales in each year from 2017 to 2021. Taking a cumulative of all property sales transactions during 2017  - 2021, West Delhi accounted for 22.2% of the sales volume. In 2021, West Delhi registered 21.5% of the total sales volume in Delhi while Central Delhi stood at 10.1%.






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