Buzz back in realty as quarterly residential sales surge to 15-year high

MUMBAI: The Indian residential market saw significant growth in Q1 2023 due to a combination of factors such as government policies, infrastructure growth, and robust launches.

Across the top seven cities of India, sales of residential units went up by 15% against the previous quarter and 20% compared to the same quarter last year, with over 62,000 units sold. This marks the highest quarterly sales in the last 15 years, indicating increased consumer confidence.

The premium segment, with apartments priced above Rs 1.5 crore, saw a 22% share in overall sales, reflecting a rising demand for bigger homes with good amenities and support infrastructure. To meet this demand, developers are increasingly focusing on premium and luxury housing, accounting for 27% of new launches.

However, the Rs 50 to 75 lakh category still makes up one-fourth of the quarterly sales, but the share of affordable apartments priced below Rs 50 lakh in quarterly sales has decreased from 22% in Q1 2022 to 18% in Q1 2023. In contrast, the share of premium apartments priced above Rs 1.5 crore has increased from 18% to 22% in the same period.

Siva Krishnan, head, residential services, India, JLL said, “In Q1 2023, the residential sector in India experienced a significant growth and became a prominent contributor to the country’s economy.”

The recovery trend since last year has brought about a revival in the market, with quarterly sales exceeding all historical peaks and continuing to grow. The sales of over 62,000 units in the first quarter of this year signify a new era in the evolution of the residential market, with new benchmarks being set, he added.

Bengaluru, Mumbai, and Pune together account for 61% of the quarterly sales. Bengaluru is currently leading the market in terms of quarterly sales, with a 21% share, closely followed by Mumbai with a 20.9% share. Pune is not far behind, as it contributed 19.4% of the quarterly sales.

These three markets have also seen heightened activity in terms of new launches. Delhi NCR has also posted impressive sales numbers, primarily due to the robust launches by established developers, particularly in Gurgaon.

Ten months ago, it was easier for people to afford homes. But now, things are harder as interest rates for loans have gone up, and residential prices in India’s top seven cities have increased by 4-12% compared to last year. The rise in prices is seen across the spectrum of projects that have high demand and less ready-to-move inventory. Even new phases of existing housing projects are being launched at higher prices.

Samantak Das, chief economist, and head research & REIS, India, JLL said, “Despite a 250-basis point increase in the repo rate by the RBI since May 2022, the residential sector has shown strong growth in the first quarter of 2023. Sales figures indicate the affordable, mid, and premium segments are all performing well. Delhi NCR and Mumbai have seen the most sales for apartments priced over Rs 1.5 crore and have also had significant launches in the premium segment. This has led to record sales for some new launches by renowned developers.”

In the first quarter of 2023, an additional 7,800 residential units were sold in the plots and villa categories in the top seven cities. Most of the sales activity was concentrated in the southern cities of Bengaluru, Chennai, and Hyderabad.

PointBoxPLOTTING HOME SALES GROWTH

PointBoxQ1 2023 sees highest residential sales in 15 years: 62,000 units sold

PointBoxSales up 15% compared to previous quarter

PointBox75,000 units launched, highest in over a decade (previous high 82,757 units in 2012)

PointBoxPremium segment dominates with 27% share for apartments priced above Rs 1.5 crore

PointBoxRs 50 to 75 lakh category still makes up one-fourth of quarterly sales

PointBoxShare of affordable apartments priced below Rs 50 lakh in quarterly sales has decreased from 22% in Q1 2022 to 18% in Q1 2023

PointBoxTop seven cities in India saw increase in new launches

PointBoxCompared to previous quarter, new launches in Q1 2023 surged by 19%

PointBoxMumbai had the most launches (22.5%), followed by Pune (21.8%) and Hyderabad (18.5%)

PointBoxDevelopers shifted focus to premium and luxury segments due to high demand for larger homes offering better lifestyles

PointBoxIn Q1 of 2023, an additional 7,800 residential units sold in plots and villa categories across top seven cities

PointBoxSales activity peaked in Bengaluru, Chennai and Hyderabad