In the first six months of this calender year, 126,500 housing units were sold in the country. This is a rise of 21 percent year-on-year (YoY), thanks to a resilient domestic economy and stable job environment, a report by international real estate consulting firm JLL said on July 10.
Bengaluru and Mumbai were the biggest markets, with a combined share of 42 percent of the H1 2023 sales. Mid and premium segments drove maximum sales momentum with 24 percent and 21 percent shares, respectively, the report said.
More than 62,000 units were sold in the first quarter of 2023 and 64,500 units in the second quarter of 2023, representing a significant 4 percent quarter-on-quarter (QoQ) growth. Mumbai and Bengaluru led the half-yearly sales, contributing 21 percent each of the total sales. Pune made substantial strides accounting for 20 percent of sales. In fact, all cities except Kolkata saw sales rise in H1 2023 compared to the year-ago period, the report showed.
In the first quarter of 2023, an additional 14,000 units were sold in the plotted developments and villa categories in the top seven cities. Most of the sales activity was concentrated in the southern cities of Bengaluru, Chennai, and Hyderabad.
Maximum sales in the luxury segment
The mid-segment apartment projects (Rs 50 lakh to Rs 75 lakh price category) dominated the half-yearly sales with a 24 percent share. However, the premium segment (more than Rs 1.5 crore) also had a substantial share of around 21 percent in the H1 2023 sales volume. Sales grew by 37 percent YoY in the case of premium apartments in H1 2023, while it increased by just 4 percent in the mid-segment.
As a result, the share of premium apartments in half-yearly sales increased from 18 percent in H1 2022 to 21 percent in H1 2023. In the luxury segment, apartments saw the highest sales growth of around 67 percent YoY in H1 2023. Its share increased from 14 percent in H1 2022 to 19 percent in H1 2023.
The share of affordable apartments priced below Rs 50 lakh declined from 24 percent in H1 2022 to 19 percent in H1 2023 sales. A similar trend was witnessed in mid-segment apartments, where the share, though still the highest, fell from 28 percent in H1 2022 to 24 percent in the current first half.
In H1 2023, the majority of the residential sales were driven by projects launched in the last 18-month period, the report said. Older inventory, which was launched before 2018 and is nearing completion, is also seeing traction. In H1 2023, around 12 percent of the sales constituted projects that were launched before 2018, it said.
With unsold inventory in quality projects declining and ready-to-move options remaining limited, completed projects contributed to only 13 percent of the half-yearly sales in 2023. As of Q2 2023, unsold inventory across the top seven cities of India increased by 2 percent on a QoQ basis, with new launches outpacing sales. Mumbai, Hyderabad, and Bengaluru together accounted for 63 percent of the unsold stock.
Prices rise by 6 to 9 percent YoY
The study said residential prices in major cities rose in the range of 6-9 percent YoY, though Bengaluru witnessed the highest increase of around 11-12 percent YoY. Kolkata, with improving buyer sentiment, has started seeing a positive movement in prices as well, albeit at a slower pace, with prices up by 2 percent YoY.
New launches remained buoyant in H1 2023
In H1 2023, 151,000 units of new residential launches were recorded. That’s a rise of 24 percent YoY. The launches also increased on a quarterly basis, with over 76,000 units launched in Q2 2023. Encouraged by strong consumer demand, developers launched projects across the top seven cities in India. Most of the new launches were witnessed in Mumbai (24 percent), Pune (22 percent), and Hyderabad (19 percent), the report added.
"With the upcoming festival season and positive customer sentiment, we anticipate the residential market to reach new heights in the second half (H2) of the year. The alignment of residential demand and supply is expected to pave the way for sustained growth in this segment," said Siva Krishnan, Senior Managing Director and Head – Residential, India, JLL.
"Over the last few years, branded developers have had a robust influx of supply. On the back of quality products that are well executed and getting delivered within the stipulated timelines, the risk appetite for consumers is also increasing," said Samantak Das, Chief Economist and Head Research & REIS, India, JLL.
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