Housing sales remain strong; register modest price rise | The Financial Express

Housing sales remain strong; register modest price rise

The company is confident to maintain the sturdy growth in pre-sales driven by new launches as well as ready-to-move in inventory.

Housing sales remain strong; register modest price rise
Year-on-year, NCR has seen a maximum increase in prices in the country at 12%, according to real estate research firm Lisases Foras.

Sales in residential real estate are still holding strong, even as high cost of raw material prices have led to some increase in property rates across key markets of India.

While the July-September months are traditionally weak due to monsoons and Shraadh period — considered inauspicious to invest in real estate — the demand held strong and prices have inched up both sequentially by about 2-3% and a slightly sharper 6-9% on a year-on-year basis even though raw material prices continued to remain high.

The price rise has been more pronounced in the middle and premium segment of the sector versus the lower band. In Delhi-NCR (National Capital Region), Noida and Greater Noida have seen the maximum increase in price at 21% from April-June when the price in the higher band was Rs 7,800 per square feet and has now gone up to Rs 9,500 per square feet, according to Magicbricks Research.

Year-on-year, NCR has seen a maximum increase in prices in the country at 12%, according to real estate research firm Lisases Foras.

“In NCR, there is still a lot of unsold stock stuck in litigations and NCLT (National Company Law Tribunal). There is limited supply and NCR also saw the maximum correction post demonetisation and also during the pandemic, so there is a recovery in prices being seen now,” said Pankaj Kapoor, founder and managing director, Liases Foras.

Comparably, all key metros have seen a high single digit to low double-digit increases in prices. Delhi saw a 7% increase in prices on a quarter-on-quarter basis in the premium band of prices which stood at Rs 30,900 per sq ft versus Rs 28,900 per sq ft. Mumbai, on the contrary, has seen a decline of about 1% in the average prices at Rs 48,800 per square feet against Rs 49,200 per square feet in the April-June quarter, according to Magicbricks Research.

According to market experts, there is a reduction in the inventory overhang because of improvement in sales during the pandemic and the prices also did not appreciate in the last five years. This coupled with rising input costs have given scope for developers to increase the price.

However, the demand has defied the seasonality and price increases, as Anarock data show, as many as 88,230 units were sold across the top seven cities in the July-September period – a 41% annual rise.

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The branded and organised developers are expected to report strong sales numbers in the second quarter of the financial year as well. Macrotech Developers (Lodha Group) reported its best ever second quarter with Rs 3,148 crores of pre-sales, despite being the seasonally weakest quarter. Abhishek Lodha, managing director and CEO, Lodha said, “It is the second time in the last three quarters when we have surpassed Rs 3,000 crore of pre-sales suggesting a strong underlying housing demand. An early read of the demand on the back of the onset of festive season gives us great confidence of a strong finish in the second half of the year”.

Ajmera Realty recorded sales value of Rs 166 crore during the July-September quarter versus Rs 91 crore in sales in the corresponding quarter last year. The carpet area sold by the real estate company was 79,976 square feet in Q2 FY23 which was an incremental growth of 49% from 53,801 sq ft in Q2 FY22. The company is confident to maintain the sturdy growth in pre-sales driven by new launches as well as ready-to-move in inventory.

“Despite all the headwinds, we have continued to charter a growth trajectory with strong pre-sales. While we expect challenges due to rising mortgage rates in the future, the impact of this would be likely insignificant given the latent demand in real estate sector. We are geared up for new launches in the coming quarters as part of our overall strategy to grow and gain market share,” said Dhaval Ajmera, director, Ajmera Realty & Infra India.

Anuj Puri, chairman, Anarock Group, said, “The trend of increased new supply by the leading and listed developers will very likely continue in the upcoming festive quarter since homeownership sentiment has increased hugely post the pandemic. To maintain the sales momentum during the ongoing festive season, developers have rolled out lucrative launch offers which are being received well in the market.”

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First published on: 10-10-2022 at 03:00 IST