Amid the COVID crisis, home sales in India's top-eight cities were recorded at 94,997 units during the July–December period of 2020 with homes priced over Rs 50 lakh making up approximately 57 per cent of the total sales, according to the latest report by Knight Frank India.

Meanwhile, the office market in those top-eight cities recorded transactions of 22.2 million square feet, the report titled “India Real Estate: H2 2020” revealed.

As the country moved towards normality, residential sales reached almost 54 per cent of the 2019 quarterly average with 33,403 units during July-September quarter, and later recovering to almost 100 per cent of pre-COVID levels at 61,593 units in quarter ending December, the report highlighted.

While new home launches at 86,139 units were lower by 23 per cent compared to the same period last year, that was mostly on part of subdued performance in the July-September quarter. In the October-December quarter, new launches witnessed a significant growth of 77 per cent over the same period last year.

“Despite the on-going pandemic in the second half of 2020, sales growth in some cities is fairly encouraging. In the quarter ending September, the real estate market started witnessing revival signs, further recording a significant improvement in home sales during October-December quarter,” said Shishir Baijal, Chairman, Knight Frank India.

He added that the RBI’s decision to maintain low repo rates has narrowed the margin between rent and home loan EMI paid to banks.

“Driving house purchase affordability to extremely attractive levels, it has emerged as a major growth driver for the housing sector,” Baijal said.

Rajani Sinha, Chief Economist, Knight Frank India, said that the rebound in residential sales has been much stronger than what was anticipated a few months back.

“Apart from pent-up demand, there has been a combination of factors like lower housing prices, attractive offers and discounts by developers, multi-decade low interest rate, high household savings that has given a strong fillip to residential sales. Government policy support like the stamp duty cut in case of Maharashtra has been a very supportive factor for the pick-up in residential sales in this region,” Sinha added. Interestingly, the Maharashtra state government’s revenue collection from registration has also picked up, implying that pick up in housing sales has more than compensated for the lower stamp duty.

In terms of office space, the year began on a high note with office leasing achieving 96 per cent of the quarterly average of 2019 in the January-March quarter of 2020. However, the government-imposed lockdown to combat the fury of the pandemic led to temporary economic inactivity and translated into a sharp fall in office leasing activities in the April-June quarter. With the return to normality, gross leasing revived to 31 per cent of the quarterly average of 2019 in July-September and eventually surging to a staggering 115 per cent in the quarter ending December.

“The commercial office space has arguably been the best performing property type during this decade. Economic upheavals brought about by the pandemic had broken its momentum in 2020 temporarily. With the possibility of a viable vaccine being made available soon, occupiers have renewed their search for expansion opportunities as evidenced by the strong transaction activity in Q4 2020,” Baijal explained.

He added that while the events of 2020 may hasten the evolution of the office space into a more flexible, sustainable and wellness-oriented environment in the long run, it was unlikely that the need for traditional office space will reduce in the foreseeable future.