Real Estate Inquiries Reach 50% of Pre-COVID levels; Bangalore and Gurugram see high interest: ANAROCK
Real estate investors, builders, end users are concerned about the impact of COVID-19 on the real estate sector in India but a report by ANAROCK suggests that inquiries for real estate have reached 50 percent of pre-COVID levels. Indian real estate sector is mainly driven by big cities, followed by tier-II (or emerging) cities and in case of commercial real estate, majority of activity takes place in metros. As per ANAROCK report, the fastest recovery has been witnessed in Bangalore, followed by Gurugram.
In Bangalore, the inquiries have reached 70 percent of their pre-COVID level while in Gurugram, ANAROCK has seen 65% of pre-COVID levels. The report also suggested that conversion rates are much higher as only serious buyers are stepping out at the moment. Non-serious inquiries have reduced due to COVID pandemic.
The recovery in real estate in big cities is encouraging and this could set the trend in smaller cities as well. Even before COVID, real estate sector was seeing slower growth and real estate developers were asking for help from the government on certain aspects that impact real estate.
Interesting, in many cities across Germany, price of residential real estate has jumped after COVID-19 lockdowns. The reason has been lower construction activity while led to less number of apartments for sale in major German cities. The higher demand after lockdowns were lifted, has led to an increase in price of residential real estate.
Talking about the trends, Prashant Thakur, director and head of research at Anarock Property Consultants said, “Hyderabad now sees an average of 15% site visits converting to sales, against 8% in the pre-Covid-19 period. Gurgaon, with just 4-5% conversions earlier, is now clocking in at 8-10%. Other cities report similar trends.”
As per ANAROCK report for Bangalore, during the last three months, enquiries for larger homes have increased up to 40% with property seekers predominantly scouting for 3-BHKs (bedroom-hall-kitchen configuration), with built up area of 1,800 sq. ft. on average against the previously-preferred 2-BHKs. The current buyers are largely working couples with children, pursuing work from home and e-learning options.
For Gurugram, Site visits are back to pre-Covid-19 levels with a sharp increase in conversion ratios—at 10% from nearly 5% previously, as per ANAROCK.
The trends are surely encouraging and if conversion ratio doubles while the total inquiries reduce to 50 percent, we can still see almost the same level of closed deals as were pre-COVID. Indian real estate sector has seen support from finance ministry in many aspects and real estate companies should move ahead with their planned projects to improve their profitability and get back on the track after COVID.