Resilient Housing Market on a Growth Path

Largely driven by Mumbai and Pune markets, the resilient residential market has shown promising growth.

According to a recent report by Proptiger.com on top 7 markets,sales of residential units and new supply witnessed an 8 percent and 11 percent year-on-year (YoY) growth in the April-June quarter of 2023 across eight major cities in the country, respectively, underscoring the resilience of the housing market.

A total of 80,250 units were sold in the eight cities in Q2 2023 compared to 74,320 in the year-ago quarter, showing a growth of 8 percent.The markets covered in the report include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region, and Pune.Mumbai and Pune continue to record the maximum traction, taking a combined share of 61 percent in overall sales in Q2 2023.

On the residential new supply front, realtors launched 113,770 units, an increase of 11 percent compared to 102,140 in the April-June quarter of 2022. Mumbai has been the frontrunner in terms of new supply, followed by Pune and Ahmedabad.

“India’s top eight residential markets continue on a growth path as RBI’s decision to pause the hike in the key lending rate helped in sustaining strong positive sentiments for buying residential properties.

.The driving factors behind the uptick in housing sales over the last two years are pent-up demand from the COVID-affected period, growing appetite for homeownership, revival in the economy post-pandemic, and the evolving need for more spacious homes. The upward trend will persist, making the 2023 calendar year even better than the previous year in terms of sales performance.,” according to Vikas Wadhawan , Group CFO REA India & Business Head Proptiger.com.

Sales

Source: Real Insight Residential – April-June 2023, Housing Research

During Q2 2023, 15 percent of the residential units sold were classified as ready-to-move-in, while the remaining 85 percent were still under construction. The majority of sales, comprising 27 percent, were concentrated in the price range of INR 45-75 lakh, closely followed by the price range of over INR 1 crore, which accounted for 25 percent of the overall sales.In a semi-annual comparison, sales witnessed notable growth of 15 percent, while new supply experienced a substantial increase of 43 percent.

Supply

Source: Real Insight Residential – April-June 2023, Housing Research

The largest portion of new residential units introduced in Q2 2023 was focused on the INR 45-75 lakh price range, accounting for the highest share of 33 percent among all launches. Notably, units priced at over INR 1 crore constituted a significant portion, representing nearly 29 percent of the total.According to  Ankita Sood, Head of Research, REA India ,PropTiger.com, Housing.com & Makaan.com, the western markets sustain their property rally as Mumbai and Pune witness considerable growth in demandin  the second quarter. These cities take a combined share of 61 percent from the national sales tally primarily boosted by demand in localities such as Thane West and Dombivali in Mumbai and Charholi Budruk and Hadapsar in Pune. This surge in demand is driven by end users seeking improved amenities and an enhanced lifestyle.