Even as the real estate sector is witnessing a robust demand this year, housing sales this year have already touched 91 per cent of 2022 sales and residential sales of 1,96,220 units were recorded in top-7 cities, which is the highest since 2008. The housing sales are likely to surpass 215,000 units by the end of 2023, according to a report by real estate JLL.
Mumbai and Bengaluru led the Q3 sales, accounting for 46.6 per cent share. Mumbai sprang to the top with 23.7 per cent share recording sales of more than 16,500 units. Bengaluru was not far behind with 22.9 per cent share.
Siva Krishnan, head (residential-India) at JLL, said, “The residential market in Q3 2023, recorded the highest quarterly sales since 2008 as the high-end segment contributed most of the demand. The robust quarterly sales at 69,600 units were backed by commensurate quality launches by the developers. On a sequential basis, sales saw an uptick of 7.9 per cent in Q3 2023.”
He added that residential sales broke all records with average quarterly sales of over 65,000 units till the third quarter of 2023. The prominent launches by branded developers saw good sales traction across all the 7 cities.
“Also, the consecutive fourth pause in policy rate by the RBI will have a positive impact on the residential sales as the financial institutions will maintain the home loan interest rates at the present levels,” Krishnan said.
Pune and Delhi-NCR also recorded healthy sales backed by quality launches by branded developers. If we analyse the quarterly sales growth data, except Chennai and Hyderabad all the cities have seen an increase in sales as compared to the previous quarter.
Samantak Das, chief economist and head (research & REIS), India, JLL, said “The robust sales in Q3 as well as the first nine months of 2023 indicates unrelenting buyer activity in the Indian residential market on the back of steady growth in employment and income and in turn sustained affordability. On a YTD comparison, sales increased by over 21 per cent led by Mumbai, followed by Bengaluru. The synergy between steady interest rates and the ongoing festive season sentiment will lead to 2023 sales clearly outpacing last year’s numbers to a new high.”
He added that there is a possibility of policy rate cut in 2024 provided the GDP growth and inflation support such a stance of RBI. In that scenario, we would likely see a further growth trajectory in the residential sector.
One differentiating trend that emerged during Q3 2023 was that the premium segment priced above Rs 1.5 crore had the highest contribution (24.3 per cent) of the quarterly sales.
This shows the increasing appetite of buyers towards larger homes with superlative amenities and specifications. Also, it is seen that homeowners are upgrading to bigger homes as developers are launching such projects taking cognisance of this demand trend. The share of all other segments except the premium, declined sequentially in Q3 2023.
Growth in sales of premium segment is significantly higher compared to that of other segments. It grew by 36.4 per cent q-o-q vis-à-vis only 2.3 per cent in the most affordable segment, JLL said in the report.
On the back of robust demand, there is an increase in residential prices across the bigger residential markets. Bengaluru witnessed the maximum appreciation in prices to the tune of 14.8 per cent on a yearly basis while in Mumbai prices increased by around 10.3 per cent.
Delhi-NCR also saw on an average 8.5 per cent rise in capital values. New launches as well as new phases of existing projects have also entered the market at higher prices in some cities.
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