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Expect complete recovery in residential realty only in 2024: Crisil

Better affordability, sustained WFH will spike demand in top six cities this fiscal. But Mumbai and Pune may see contraction due to the higher base of last fiscal

Housing market | Real Estate  | home sales

Arnab Dutta  |  New Delhi 

real estate, farm house, housing, luxury, rich indians, property market

Although the market is growing in 2021-22, a full recovery in the residential realty sector is expected only in 2024, ratings agency said today. According to it, the country’s is expected to grow by 5-10 per cent in the current fiscal year.

“Improved affordability and continuing work-from-home will increase demand for residences in India’s top six cities this fiscal. But two of these–Mumbai and Pune–could see demand contracting due to the higher base of last fiscal, while the rest should see a rebound on a low base. However, absolute demand will catch up with pre-pandemic levels only after fiscal 2023,” noted.

In FY22, while the overall housing demand may remain subdued due to the second Covid wave, market sentiments is expected to improve steadily, in line with the recovery last year, from October-onwards. Further, the ongoing pandemic and its economic fallout will help larger developers grow faster now – leading to consolidation in the market. “Established developers with well-managed balance sheets would grow faster than the industry, consolidate their presence, and sustain their credit profiles”, it said.

Incidentally, since FY2017 share of listed realty players have grown from 6 per cent to 22 per cent by end-FY2021 in the housing market, data from Anarock shows.

According to Isha Chaudhary, director at Research, “Demand in Bengaluru, Hyderabad, the National Capital Region and Kolkata is set to rise 40-45 per cent this fiscal after plunging 25-45 per cent last fiscal, propelled by better affordability and lower base.


Crisil’s analyses show established developers that have been prudent in decision making, have well-managed balance sheets and comfortable debt-to-total assets ratio of below 30 per cent. Further, they are also better prepared in terms of liquidity. Between 2016 and 2021, these players have raised close to Rs 44,000 crore via equity, and land and commercial assets monetisation. “The improved financials will come in handy to tackle stress from the second wave, meet growth needs and keep their credit profiles stable”, it noted.

Its estimates now suggest a slowdown in new launches in the current fiscal year as developers will focus on sale of ready or near-complete properties, leading to a gradual reduction in inventory.

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First Published: Thu, May 27 2021. 19:32 IST