The Indian real estate market is seeing a surge in housing sales, a report released by real estate data, research and analytics firm PropEquity said.
The firm said that the top 14 cities in the country saw an average increase of 7 per cent year-on-year (YoY) basis in housing sales during the first quarter of the current calendar year.
The growth in the Indian residential market between January and March 2023 was driven by several factors, including infrastructure growth, government policies, and robust launches, said the PropEquity report.
In terms of quarterly sales, Pune, Thane, and Hyderabad topped the charts, with Pune selling 25,536 units in Q1CY23, accounting for approximately 21 per cent of total sales. In Thane, 24,481 units were sold, while in Hyderabad, 17,236 units were sold. These three cities accounted for more than 54 per cent of all 14 cities' unit sales.
According to the report, the number of new residential units launched in India has decreased. This pattern has been observed since the Covid-19 pandemic began in 2020. It is thought to be due to the clearance of previous stock.
The number of new residential units released in the first quarter of 2023 fell by 18 per cent YoY to 93,600, compared to 113,491 in the first quarter of 2022. 99,019 units were launched in the December 2022 quarter, representing a 5 per cent decrease on a sequential basis (QoQ).
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Individually, Faridabad was the worst hit in terms of new launches, reporting a 100 per cent drop YoY, followed by Ghaziabad, which witnessed a 61 per cent drop. However, Gurugram saw a 560 per cent increase in new launches at 9,610 units, followed by Chennai at 6,276 units, a 135 per cent increase YoY.
The drop in new launches could be attributed to a variety of factors, including current market conditions, supply chain disruptions, and construction delays.
Market analysts believe that the housing market's growth trajectory will likely continue in the near term, but growth has slowed in the last two quarters due to persistent inflation concerns and the possibility of a Reserve Bank of India (RBI) rate hike in the near future.
"The residential market in India saw significant growth Q1 2023, and it started to play a big role in the economy of the nation. Market resurrection has been brought about by the recovery trend since last year, with quarterly sales surpassing the new launches in this quarter by 32 per cent," said Samir Jasuja, Founder & Managing Director at PropEquity.
"All parties worked together to fuel this growth and quickly adjusted to shifting customer demands. Residential sales and launches reached record highs as branded developers upped their game and provided supplies. With 1,23,938 units sold in the first quarter of this year, the residential market has entered a new stage of development and new standards have been set," he said.
With a surge in new launches and home sales in the current and preceding quarters, the available inventory in the top 14 cities is expected to reach 5,17,879 units by the end of March 2023, up 14 per cent over the previous year.
In terms of absolute numbers, Delhi has the fewest residential inventory (793 units), followed by Faridabad (920 units). Due to the opening of more new developments, the number of unsold apartments in Chennai and Gurugram has climbed by 32 per cent and 15 per cent, respectively.
The weighted average price of sales in Delhi is Rs 22,675 per square foot (/sq ft), an increase of 13 per cent year-on-year. Mumbai comes in second at Rs 21,356/sq ft. Gurugram has led the growth rankings, with average prices soaring 42 per cent to Rs 14,000/sq ft. Faridabad is the only city where costs have decreased.
Despite global geopolitical tensions, the Indian real estate market has remained relatively unscathed in the first quarter of 2023. Because of its stable economic policies, solid governance, and investor-friendly reforms, India has weathered the storm better than most other countries.
The real estate market has shown resilience and continued growth, particularly in the affordable housing segment, driven by increased demand from middle-class and first-time homebuyers. This upward trend is expected to continue, buoyed by the government's initiatives to improve infrastructure development and ease of doing business.
"The first quarter of 2023 definitely brings cheer to the residential real estate market; home sales across all the top cities of India have registered double-digit growth. We see sales reaching an all-time high with a whopping 170 per cent YoY growth in Gurugram," said Ankush Kaul, chief business officer- Ambience Group.
PropEquity, which is owned and operated by PE Analytics, is one of India's largest online real estate data and analytics platforms, with over 150,000 projects from over 45,000 developers across 44 cities in India and over 16 years of catalogued data.