Accelerating inflation globally, coupled with a premium being charged for ready-to-move-in residential units, has pushed up prices of new supply and existing inventory across top cities of India by 7 percent Year-on-Year (YoY) by the end of 2022, a report by PropTiger said.
"While the weighted average price across cities has appreciated in the range of 5-13 per cent, they have risen at a higher rate in key micro markets of major cities," the report said.
The average price per square foot is between Rs 6,000-6,200 in Bengaluru, Rs 7,000-7,200 in Gurugram, and Rs 10,100-10,300 in Mumbai.
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Unsold inventory
"The unsold inventory stood at 8.49 lakh by the end of 2022 with 80 percent of this stock under various stages of construction. Out of the available stock in the top-8 cities, nearly 20 percent of the unsold units fall in the ready-to-move-in category," the report added.
Bengaluru has 78,500 unsold units, Delhi-National Capital Region 98,290 and Mumbai 304,000.
Pune, Kolkata and Chennai have the lowest inventory overhang of 26 months; Delhi-NCR continues to have the highest inventory overhang of 61 months, the report said.
Based on current sales velocity, the expected time builders would need to sell existing unsold stock has already decreased to 33 months, down from 42 months in 2021.
Mumbai, Ahmedabad lead property demand in 2022
The western markets of Mumbai and Pune continued to show the most traction, accounting for 56 percent of total sales in 2022.
Mumbai experienced 87 percent YoY growth, followed by Ahmedabad at 62 percent, and Hyderabad at 59 percent this year. Bengaluru reported 22 percent YoY growth in 2022.
"In Q4 2022, residential demand was at par with the pre-pandemic levels of 2019. With 80,770 units sold in the final quarter of 2022, the demand registered 19 percent growth over Q4 2021," the report added.
While increases in property prices and interest rates have slowly begun to outweigh positive homebuyer sentiment to an extent and are expected to have a short-term impact, the overall consumer outlook continues to remain positive, the report said.
New launches
In Q4 2022, 145,030 units were launched, recording a 95 percent increase YoY. New launches stayed above the 100,000 mark for the third consecutive quarter in 2022.
Mumbai saw the highest number of launches at 160,000, followed by Hyderabad at 82,800, and Pune at 75,310. Ahmedabad and Chennai saw about 20 percent fewer launches compared to last year.
Bengaluru's launches almost doubled since 2021.
"It is important to note that we have seen strong growth across segments, including housing, office, retail, warehouse, data centres, co-working, and co-living. In the post-RERA world, NRI demand for Indian property has also increased and given a boost to tier–II markets also," said Vikas Wadhawan, Group CFO, Housing.com, Makaan.com and PropTiger. RERA is short for Real Estate Regulatory Authority.
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