New Delhi, Nov 5: Housing sales may fall by 35-40 per cent in the ongoing fiscal year even as demand improved during the September quarter, rating agency ICRA said while revising its forecast.

It had earlier estimated a 45 per cent decline in sales volumes in FY2021.

Sales across the top eight cities -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Pune, Hyderabad and Ahmedabad -- rebounded in the second quarter of FY2021, indicating some green shoots of normalisation.

"With some further recovery expected in H2, ICRA is revising its earlier estimate of sales volume decline in FY2021 to 35-40 per cent," it said in a statement.

ICRA said the uptick in absorption levels during the second quarter of FY2021 has been driven by affordable and mid/upper-mid segments.

The residential real estate segment witnessed a sharp recovery in the September quarter, post a severe decline in Q1 FY2021.

The Covid-19 pandemic had triggered one of the worst demand crashes that the Indian residential real estate industry witnessed in recorded history.

"Overall, the housing sales volume witnessed a year-on-year decline of 50 per cent in H1 FY2021 across the top eight cities of the country," ICRA said.

However, sales volume bounced back considerably, with a quarter-on-quarter growth of 60 per cent recorded across property markets in the second quarter of the current fiscal.

The recent improvement was primarily driven by a gradual unlocking of the economy, pent-up demand and improved affordability on the back of reduced home loan rates and attractive payment schemes/discounts, the rating agency said.

According to PropTiger.com, housing sales across eight cities dropped 54 per cent in January-September 2020 to 1,23,725 units from 2,67,333 units in the corresponding period of last year.