Robust Growth in India's Residential Real Estate Market
According to PropTiger.com's "Real Insight Residential– July-September 2023" report, India's top eight residential markets experienced significant growth in the third quarter of 2023. Residential unit sales surged by 22% year-over-year, reaching 1,01,220 units compared to 83,220 units in Q3 2022. The report also highlighted a 17% increase in new supply during the same period.
The eight key housing markets tracked in the report are Delhi-NCR, MMR, Chennai, Kolkata, Bengaluru, Hyderabad, Pune, and Ahmedabad. These include sales data for both apartments and villas within their respective micro-markets. For instance, Delhi-NCR includes Gurugram, Greater Noida, Faridabad, and Ghaziabad, while MMR encompasses Mumbai, Thane, and Navi Mumbai.
Vikas Wadhwan, business head of PropTiger.com and CFO of REA India, commented on the market’s positive trajectory: “The housing markets in the top eight cities are still expanding. Positive customer sentiment supports the robust demand.”
He attributed this sales growth to several factors, including pent-up demand, increased disposable income, stable interest rates, and renewed investor interest.
City-Specific Sales Performance
The report reveals varied sales growth across the eight cities:
- Ahmedabad: Sales increased by 31%, from 7,880 units to 10,300 units.
- Bengaluru: Witnessed the highest growth at 60%, with sales jumping from 7,890 units to 12,590 units.
- Delhi-NCR: Experienced a 44% rise in sales, from 5,430 units to 7,800 units.
- Hyderabad: Sales grew by 34%, from 10,570 units to 14,190 units.
- Kolkata: Registered a 43% increase in sales, from 2,530 units to 3,610 units.
- Mumbai (MMR): Showed a modest increase from 28,800 units to 30,300 units, attributed to a higher base in the previous year.
- Pune: Sales rose by 18%, from 15,700 units to 18,650 units.
- Chennai: Was the only market to experience a decline, with sales dropping by 12% from 4,420 units to 3,870 units.
An industry expert observed the increasing market consolidation: “The market is consolidating, with demand centered around reputable developers, which gives homebuyers renewed confidence, especially for projects still under construction. It was not the case a few years ago.” The report also highlights that 31% of Q3 sales were in the price range above ₹1 crore, and 14% of units sold were ready-to-move-in.
Positive Outlook for the Future
Ankita Sood, chief of research for PropTiger.com, Housing.com, and Makaan.com, provided an optimistic outlook: “Despite global difficulties, Indian real estate markets are strengthening in all major cities. The 22% rise in property sales from July to September and the 17% year-over-year growth in new launches indicate that we are in the midst of a residential real estate upcycle. We predict the holiday season will result in further revenue, perhaps breaking previous year’s records.”
Regarding new supply, Ahmedabad led the growth with 16,670 new units, while other cities displayed varying trends. Overall, new supply remained positive, with 123,080 units added across the eight markets, a 17% increase.