Home sales down 11% in July-September; observers cite higher prices, monsoons as reasons

Home sales down 11% in July-September; observers say higher prices, monsoons to blame

Residential sales for the July-September quarter across the country's top seven markets declined by around 11 percent year-on-year, with sales during the Ganeshotsav in Mumbai, one of the most popular residential sales windows, being lower over the same period last year as well. While monsoons played a part in decreasing sales during the reported period, according to industry observers, buyers were seen going into a wait-and-watch mode in the face of home prices increasing may have also caused a decline in sales.

However, developers also added that they are banking on strong sales over the rest of the festive season, over Dusshera and Diwali, as a comeback for the rest of the ongoing year, adding that sales and launches are often bunched up during the festive season, particularly over Diwali.
A report from real estate consultants Anarock found that sales across seven cities - Mumbai metropolitan region, National Capital Region, Kolkata, Chennai, Bengaluru, Pune, and Hyderabad, stood at around 1.07 lakh units for July-September (till date) as against 1.2 lakh in the same quarter last year. The sales represent an 11 percent decline over the same quarter last year, as well as sequentially, the Anarock report said.

Anuj Puri, chairman of the Anarock group, said that a sharp increase in home prices over a two year-period, has decreased affordability for many homebuyers.

"...The fact is that housing prices have risen significantly in the last one to two years. Many buyers have again gone into a wait-and-watch mode. As per Anarock Research, average residential prices across the top 7 cities have seen 23 percent yearly growth in July-September 2024 as against July-September 2023. Further, if we compare data trends in the last two years, then average prices have risen by 37 percent between Q3 2022 and Q3 2024. This has put pressure on many buyers as affordability has gone down," Puri said, in a statement to Moneycontrol.

Puri added that investors may have also taken a breather from closing deals, as prices have reached a peak.

In the Mumbai metropolitan region, India's largest housing market, home sales decreased by 13 percent on year to 36,190 units, according to data from Anarock, which also represents a 6 percent decline sequentially. Property registrations in Mumbai during Ganeshotsav, regarded in the city and the state by many as an auspicious time to buy property or register their purchases, reported a decline, with 3,405 registrations from September 7 to 17, against 3,782 registrations from September 19 to 28 last year, according to data from the state government, accessed by Knight Frank.

According to developers, the decline in home sales during the monsoon-marred July-September quarter sets them up for a stronger festive season.

"The recent 11 percent decrease in housing sales during the July to September 2024 period is simply a seasonal dip, characteristic of the monsoon and Shraad period. Rather than being a cause for concern, this temporary slowdown paves the way for a significant rebound in the Indian real estate market. Housing demand in India continues to increase steadily due to a growing economy and the strong purchasing power of homebuyers. Overall, home sales are expected to bounce back and increase by 30-40 percent across the industry during the peak of the festive season," said Dhaval Ajmera, director of listed developer Ajmera Realty and Infra India.