Residential sales of 196,220 units were recorded in the top seven cities during the first nine months of 2023 – almost 91 percent of last year’s sales – and are set to surpass 215,000 units by the end of the year, according to JLL India’s Residential Market Update – Q3 2023.
Steady interest rates and the ongoing festive season sentiment will lead to sales in 2023 clearly outpacing last year's numbers to a new high. Demand for residential apartments will be backed by a robust supply pipeline as developers announce new launches and enter newer markets including peripheral micro markets where infrastructure augmentation is in process or planned, it said.
Strategic land acquisition in prime locations as well as in growth corridors is expected to strengthen supply. The residential market is expected to remain buoyant and achieve the next wave of growth and expansion with good response from buyers in the mid as well as premium segments, it said.
The seven cities are Bengaluru, Chennai, the National Capital Region, Hyderabad, Kolkata, Mumbai and Pune.
The residential market in Q3 recorded the highest quarterly sales since 2008 as the high-end segment contributed most of the demand, JLL said. Quarterly sales at 69,600 units were backed by commensurate quality launches by developers. On a sequential basis, sales climbed 7.9 percent in Q3.
“Residential sales broke all records with average quarterly sales of over 65,000 units till the third quarter of 2023. The prominent launches by branded developers saw good sales traction across all the seven cities,” said Siva Krishnan, head - residential, India, JLL.
Mumbai, Bengaluru lead
Mumbai and Bengaluru led Q3 sales, accounting for a 46.6 percent share. Mumbai had a 23.7 percent share with sales of more than 16,500 units. Bengaluru had a 22.9 percent share with 15,960 units.
Pune (13,440 units) and the NCR (10,046 units) recorded healthy sales. Except in Chennai and Hyderabad, sales increased in all the cities from the previous quarter, the report showed.
One differentiating trend that emerged during Q3 was that the premium segment – priced above Rs 1.5 crore – had the highest contribution (24.3 percent) of quarterly sales. This showed the increasing appetite of buyers for larger homes with superlative amenities and specifications.
Homeowners are upgrading to bigger homes as developers launch such projects, taking cognizance of the demand trend. The share of all other segments except premium, declined sequentially in Q3.
The growth in sales of the premium segment was significantly higher than that of other segments. It grew 36.4 percent q-o-q vis-à-vis 2.3 percent in the most affordable segment.
On the back of robust demand, residential prices increased across the larger markets. The maximum appreciation in prices was in Bengaluru – to the tune of 14.8 percent on a yearly basis – while in Mumbai, prices increased by 10.3 percent. In the NCR, the average rise was 8.5 percent. New launches and new phases of existing projects entered the market at higher prices in some cities.
“The robust sales in Q3 as well as the first nine months of 2023 indicate unrelenting buyer activity in the Indian residential market on the back of steady growth in employment and income and, in turn, sustained affordability. On a YTD comparison, sales increased by over 21 percent, led by Mumbai, followed by Bengaluru,” said Samantak Das, chief economist and head - research & REIS, India, JLL. “There is a possibility of a policy rate cut in 2024 provided GDP growth and inflation support such a stance of RBI. In that scenario, we would likely see a further growth trajectory in the residential sector.”
For new launches, despite a marginal decline in pace during Q3, the first nine months clocked robust Y-o-Y growth of 21.5 percent at 223,905 units. More than half of the launches (54.1 percent) were in Mumbai and Pune. Most of the new launches were in the premium segment (apartments priced above Rs 1.5 crore) with a share of 43.2 percent.
As of Q3, unsold inventory at various stages of construction across the top seven cities increased by 0.6 percent on a q-o-q basis, with new launches outpacing sales. Mumbai, Hyderabad, and Bengaluru accounted for 64 percent of the unsold stock.
The expected time to liquidate unsold stock declined to 2.3 years in Q3 from 2.5 years in Q2, indicating robust sales growth.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
