Residential real estate sales in India were at their highest since the peak seen in 2013, witnessing a 33 percent YoY growth, with a total of 4.10 lakh units sold during calendar year 2023, according to the latest report by PropTiger.com.
According to the report titled ‘Real Insight Residential – Annual Round-up 2023 (January – December)’, India registered double-digit growth in both demand and new supply in the calendar year 2023 with new supply at an all-time high and sales velocity sustaining momentum.
The figures include the sales numbers for all four quarters in the calendar year for the top eight cities, including Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), MMR (Mumbai, Navi Mumbai & Thane) and Pune.
A total of 5,17,071 units were launched in 2023 as against 4,31,510 units in 2022, registering a sharp growth of 20 per cent YoY. Mumbai, Pune, and Hyderabad have been the frontrunners in terms of new supply in 2023, taking a combined share of 70 percent in the overall new launches in 2023.
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Stable interest rates are poised to boost home purchases and instill confidence in developers, enabling them to present more attractive offerings in the New Year, extending beyond the festive season. This stability sets a positive tone for the real estate sector as we step into a new phase of growth in 2024.
“Despite initial challenges, such as rising interest rates, escalating input costs, and surging real estate prices amid global uncertainties, the industry demonstrated exceptional resilience. The pent-up demand following the pandemic served as a key driver, propelling the property market to unprecedented levels. The Reserve Bank of India’s decision to pause rate hikes in April 2023 played a crucial role in boosting buyer confidence,” said Vikas Wadhawan, Group CFO of Housing.com, Makaan.com & PropTiger.com.
“The positive upswing in consumer sentiment is fueling robust demand for mid-premium and premium housing. Recent premium launches in Delhi and Bangalore exemplify the sector’s resilience. However, the affordable sector may encounter challenges amid price surges. Given this outlook, success in the New Year lies in capitalising on the existing momentum and adapting to market nuances,” added Wadhawan.
Ankita Sood, Head of Research, PropTiger.com, Housing.com & Makaan.com, said, “India’s residential realty is in its stellar phase with both demand and supply mirroring the hay days of 2010. A robust economic backdrop, rising disposable income, coupled with heightened property investment sentiments has led to an impressive YoY sales surge of 33% and a 20% growth in new supply. National developers have capitalised on this momentum, launching the right product fits and also preparing a strong project pipeline for 2024. We saw demand peaking in the service sector dominated cities which saw a steep 15–20% YoY uptick in property prices; double that of the national average.”
In 2024, geopolitical risks remain but despite that, upbeat consumer outlook signals a continuum in the property market upcycle both in the metros and Tier 2 cities.’
Mumbai, Pune and Hyderabad witnessed maximum traction in 2023
The data and insights for 2023 suggest that demand has grown both sequentially and yearly in all four quarters of the year. The western & south markets Mumbai, Pune and Hyderabad continued to show maximum traction, taking a combined share of 67 percent in overall sales in 2023. Ahmedabad followed by Hyderabad witnessed the highest growth of 51 percent and 48 percent YoY in sales as compared to other top cities in 2023.
In 2023, residential demand continued its upcycle and was at its highest since the peak seen in 2013. Units with higher ticket sizes, i.e., INR 1-3 crore took the highest share of 24 per cent in the overall demand. The share of this price bracket has grown significantly from the pre-pandemic quarter levels of 15-17 percent of 2019. While the hike in property prices and interest rates has slowly begun to outweigh positive homebuyer sentiment to an extent and is expected to have a short-term impact, the overall consumer outlook continues to remain positive.
Buyer sentiment driving new launch wave
Buyer sentiment is also propelling a new wave of launches. This year has seen a notable upswing in property launches, signaling robust demand and elevated consumer confidence in a strengthening economy. The majority of units launched fell within the INR 1-3 crore range, comprising 31 percent of the overall new supply in the top-eight cities.
In 2023, a total of 517,071 units were launched, reflecting a 20 percent increase year-on-year (YoY). The new launches have consistently remained above the one-lakh mark with the gone year clocking its best year thus far.
Commenting on the report, Mohit Jain, Managing Director, Krisumi Corporation, said, “The year 2023 was a story about residential sales and the emergence of luxury real estate as key driver. With its skyrocketing capital value appreciation, luxury properties have outshone other segments comfortably. This is set to continue in 2024, fueled by both the appeal of world-class living and the promise of robust returns. Gurugram stands poised to be the epicenter of this luxury boom amid a host of favorable factors like a growing appetite for spacious homes, a constant influx of high-net-worth individuals, and above all a booming economy. With its unparalleled offerings, it is poised to be the address of choice for end-users and investors alike.”
Prashant Rao, Managing Director, Poulomi Estates, a Hyderabad based real estate developer, said, “The residential real estate sector has experienced a significant upswing in the demand in recent years. This change is not confined to major hubs like MMR and NCR regions alone, but has also spread to other metropolitan cities such as Hyderabad and Bengaluru. In cities such as Hyderabad, there is a notable influx of IT and BFSI companies, as a result there is now a growing demand for larger apartments, some even exceeding 10,000 square feet, a trend not previously observed. Homebuyers’ aspirations for modern, luxurious, and spacious residences have notably escalated. This trend is anticipated to persist for several more years, given the robust and progressive trajectory of the Indian economy.”