Housing sales not hit in many cities: Survey

New DelhiHousing sales mostly declined during the first and the second wave of the coronavirus pandemic but prices did not fall in most of the cities but rather increased in some cities, according to the Economic Survey 2021-22.

The pre-Budget document also highlighted that the housing demand recovered after both the waves on the back of pent up demand, low interest rates on home loans and reduction in stamp duty by some States.

The survey has analysed the National Housing Bank's data on change in housing transactions in Q1FY21 (first Covid-19 wave) and Q1FY22 (second Covid-19 wave) over the pre-pandemic levels of Q1FY20. It also looked into change in housing prices index during this period.

"It can be broadly observed...that the response of housing transactions to Covid-19 shock is much higher than the response of housing prices. This implies that shocks to housing sector adjust more through changes in transactions than prices," the survey said.

As price response remains relatively lower than the response of transactions, the survey noted that transactions are better indicator to gauge sentiments in the housing market. "While house transactions mostly declined during the Covid-19 shocks, their prices did not fall in most of the selected cities, some even increased," it added. Unlike the decline in quarterly housing transactions during the first and the second waves of the pandemic, the impact of Covid-19 shock on the prices of residential properties was not uniform across the cities.

During the first Covid-19 wave, housing prices increased in cities such as Gandhinagar, Ahmedabad, Hyderabad, Thane, Mumbai, Kolkata, Pune and Bengaluru over the pre-pandemic level.