Stable economic conditions, positive buyer sentiments, and supply from established developers is helping Indian residential property market scale a new high. The first quarter of the year has recorded the highest residential sales to date despite higher mortgage rates and prices that are witnessing a steady uptrend.
Top seven property markets of the country have registered total sales of 74,486 apartments during the quarter, which marks the second consecutive quarter where sales have exceeded 74,000 units, following the record-breaking performance with 75,591 apartments in the December quarter, showed data from JLL India.
This sets a strong foundation for sustained growth in the residential market, surpassing the sales performance of 2023. Mumbai Metropolitan Region, Bengaluru, and Pune have driven the performance recording highest quarterly activity at 47,388 units or 64% of total sales.
“While Bengaluru and Pune recorded highest sales in the Rs 50 lakh-75 lakh price segment, Mumbai saw maximum sales in the Rs 1.5 crore-3 crore price segment. The strategic launch of right products by the developers taking into cognizance the demand and market dynamics has led to this new growth phase in the residential market,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
Share of the luxury segment with apartments priced above Rs 3 crore has increased to 11% of sales from 5% in the first quarter of 2022. However, the overall sales in the top seven cities, the Rs 50 lakh-75 lakh segment retains its prominence and holds the largest share.
“Activity in the premium and mid-income housing is strong and continues to drive the overall performance to newer peaks. Higher home loan rates have been holding the growth in the affordable housing segment. But, likely reduction in rates later this year will help push the performance of this segment upward,” said Deepak Goradia, CMD, Dosti Realty.
Home loan rates are currently hovering around 9% and industry participants are of the view the same to start easing in the second half of the year. JLL India expects the residential sales to be around 300,000-315,000 units in 2024 as the growth momentum currently seen is expected to be carried forward.
“There have been notable shifts in the sales distribution across different segments of the residential market…These figures reflect a shifting trend in the real estate market, with buyers showing increased interest in the luxury segment. It underscores the need for developers to cater to evolving buyer preferences and adapt their offerings accordingly,” said Siva Krishnan, Head – Residential Services, India, JLL.
Residential prices in the top seven cities of India have been on an upward trajectory during the quarter, with increases ranging from 3-15% from a year ago. The highest price increase was witnessed in Bengaluru and Delhi NCR to the tune of around 15%.
As quality launches are being sold at a rapid pace, the availability of such inventory is restricted, leading to a surge in prices. Moreover, developers are introducing new phases of ongoing projects at higher price levels.
As of March end, unsold inventory across the seven cities increased 1% on a sequential basis. Mumbai, Bengaluru, and Hyderabad together accounted for 66% of the inventory. An assessment of years-to-sell (YTS) shows that the expected time to liquidate the stock has remained the same at 2.1 years.
