Real estate sales have yet again paved the way for continued confidence in the sector — both in terms of aspiration to own a house and as one of the safest investment options. The top eight cities saw eight percent year-on-year rise in sales of residential units in the second quarter of 2023, according to recent data gathered by top real estate firms.
A quarterly analysis of India's top eight residential markets by real estate advisory firm PropTiger in its Real Insight Residential – April-June 2023 report said, "Sales of residential units and new supply witnessed an 8 percent and 11 percent year-on-year (YoY) growth, respectively, in the April-June quarter of 2023 across eight major cities in the country, underscoring the resilience of the housing market.”
"A total of 80,250 units were sold in the eight cities in second quarter of 2023 compared to 74,320 in the year-ago quarter, showing a growth of eight percent,” the report added.
All time high
Quarterly housing sales are at an all-time high with about 1,15,100 units sold in Q2 2023 across the top seven cities. This is a 36 percent yearly rise as against approximately 84,940 units sold in Q2 2022, as per by ANAROCK's quarterly research report.
The Mumbai Metropolitan Region (MMR) and Pune accounted for over 51 percent of the total sales in the top seven cities, with Pune witnessing the highest yearly growth of 65 percent. As many as 58,770 units were sold altogether in these two cities, as per the report.
Meanwhile, new launches across the top seven cities once again breached the one-lakh mark and witnessed a 25 percent yearly rise – from 82,150 units in Q2 2022 to over 1,02,610 units in Q2 2023. Interestingly, MMR and Pune again saw the maximum new supply, accounting for 63 percent of the total new launches across the top seven cities. Individually, the two cities saw 31 percent and 29 percent yearly increase in their new supply, respectively, the report added.
REA-backed PropTiger’s research mentioned, "Mumbai and Pune continue to record the maximum traction, taking a combined share of 61 percent in overall sales in Q2 2023."
On the residential new supply front, realtors launched 113,770 units — an increase of 11 percent compared to 1,02,140 in the April-June quarter of 2022. Mumbai has been the frontrunner in terms of new supply, followed by Pune and Ahmedabad, as per the PropTiger report.
Home loan rates
Vikas Wadhawan, Group CFO, REA India, and Business Head of PropTiger, said, "India’s top eight residential markets continue on a growth path with sales rising by 8 percent in the June quarter (2023). The RBI's decision to pause the hike in the key lending rate helped in sustaining strong positive sentiments for buying residential properties."
"The driving factors behind the uptick in housing sales over the last two years are pent-up demand from the COVID-affected period, growing appetite for home-ownership, revival in the economy post-pandemic, and the evolving need for more spacious homes. We anticipate that the upward trend will persist, making the 2023 calendar year even better than the previous year in terms of sales performance," Wadhawan added.
On the other hand, Anuj Puri, Chairman, ANAROCK Group, said “The housing market is yet to feel the impact of the home loan rate hike early this year, and of the global economic headwinds. It continues to be on a roll, with the momentum remaining strong even in the second quarter of 2023. Housing sales in the top seven cities broke the previous high record of Q1 2023 and stood at more than 1.15 lakh units in Q2 2023.”
City-wise breakup
“Pune and MMR were the only two cities to see a quarterly rise in housing sales — of 4 percent and 10 percent, respectively, while other cities saw some dip. But on a yearly basis, most of the top seven cities saw significant jumps in housing sales,” Puri added.
On the sales front, during Q2 2023, 15 percent of the residential units sold were classified as ready-to-move-in, while the remaining 85 percent were still under construction. The majority of sales were concentrated in the price range of Rs 45-75 lakh, comprising 27 percent of all the house sales. The units with a price range of over Rs 1 crore closely followed, accounting for 25 percent of the overall sales, according to the report.
In a semi-annual comparison, sales witnessed notable growth of 15 percent, while new supply experienced a substantial increase of 43 percent, it added.
In terms of new launch overview, the top seven cities recorded around 1,02,610 units in Q2 2023 against 82,150 units in Q2 2022, increasing by 25 percent over the previous year’s corresponding period as per ANAROCK's data.
The key cities contributing to new launches in Q2 2023 included MMR, Hyderabad, Pune, and Bengaluru. These four cities together accounted for 84 percent supply addition, the data added.
MMR saw a launch of around 43,390 units in Q2 2023 — increasing by 31 percent over Q2. The sub-Rs 80 lakh budget segment observed more than 61 percent of the new supply. Pune added new supply of approximately 21,350 units in Q2 2023 compared to 16,560 units in Q2 2022 – an increase of 29 percent.
Also, Hyderabad and Bengaluru saw a yearly decline of 51 percent and 9 percent in new launches, respectively in Q2 2023 over the corresponding period last year as they added around 10,470 and 11,440 new units, respectively.
The NCR, Chennai and Kolkata observed an increase of 52 percent, 71 percent and 22 percent, respectively in new supplies in Q2 2023 against Q2 2022. Nearly 8,460 new units were launched in Q2 2023 in NCR while Chennai and Kolkata added roughly 5.040 and 2,460 new supplies, respectively, as per the data.
Prices
In terms of price movement, the average residential property prices across the top seven cities increased in the range of 6-10 percent in Q2 2023 compared to the corresponding quarter in 2022, mainly due to an increase in the prices of construction raw materials and overall rise in demand. Hyderabad recorded the highest 10 percent annual jump and stands at Rs 4,980 per square feet as of Q2 2023-end, according to ANAROCK’s data.
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It is to be seen, till when this real estate boom will continue as high interest rates could derail the momentum.
