India’s top seven residential markets continued their bull run in 2023 with housing sales increasing by 26% on a year-on-year basis to touch 2.71 lakh units. Tech-driven cities such Pune, Chennai, Bengaluru, and Hyderabad witnessed increased sales compared to the previous year, a report by JLL said on January 10.
Both premium (apartments priced above ₹1.5 crore) and mid segments (apartments priced between ₹50 lakh to ₹75 lakh) jointly led the 2023 annual sales at 23% share each, it said.
The seven cities included Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Kolkata, and Pune.
In 2024, the growth trajectory is likely to continue with residential sales to be around 3 lakh to 3.15 lakh units (10-15% Y-o-Y growth), with the assumption that India’s current GDP growth would sustain with a range bound inflation in the economy and a decrease in home loan interest rate by 40-50 bps during the year, the report said.
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Strategic land acquisitions at prime locations as well as along growth corridors in cities is expected to strengthen the supply inflow across cities, it said.
Housing sales up by 26%; Tech-driven cities drive sales
The year 2023 saw sales surpassing the previous peak of 2010 by 25%. On a y-o-y basis as well, 2023 sales were up by 26%, with every quarter performing better than the previous one. The fourth quarter of the year saw stupendous sales with 75,500 units sold during the quarter, making it also the best performing quarter ever, the report said.
Tech driven cities have seen impressive annual growth led by heightened sales activity.
“The tech cities of Pune, Chennai, Bengaluru, and Hyderabad witnessed a remarkable growth in sales as compared to the previous year. The significant upside in the sales in 2023 reflects the innate potential of these markets. The demand is primarily driven by an increasing return to office in the IT/ITeS sector and expansion of global firms and Global Capability Centres (GCCs) along with setting up of new ones,” said Samantak Das, Chief Economist, and Head Research & REIS, India, JLL.
Delhi NCR and Mumbai witness maximum sales of apartments priced above ₹1.5 crore
The overall sales across the top seven cities picked up significant momentum in the second half of the year. It is pertinent to note that both mid-market and premium segments have contributed jointly 23% each to drive the sales in 2023. Delhi NCR and Mumbai have seen the maximum sales in the premium segment (apartments priced above ₹1.5 crore). There is a rising demand for bigger homes with premium amenities and support infrastructure.
Delhi NCR saw some prominent launches in the premium segment that were sold out within a few days. Around 45% of the annual sales in Delhi NCR during the year was contributed by the premium segment.
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The premium segment’s share in annual sales has increased from 19% in 2022 to 23% in 2023. In fact, the premium segment has also emerged as a leader in terms of absolute apartment units sold during the year surpassing every other price segment. Also, apartments priced less than ₹75 lakh, have seen a perceptible decline in share.
“With the unchanged repo rate, robust supply pipeline announced by established developers and steady land acquisitions taking place in the last one year, the market reflects a positive outlook for 2024,” said Siva Krishnan, Managing Director and Head, Residential Services, India, JLL.
Prices move northwards.
In 2023, there was a rise in residential prices across the top seven cities of India in the range of 4-16%y-o-y. Bengaluru has seen the maximum rise to the tune of 16% followed by Delhi NCR at 12%. The increase in prices is seen across the spectrum of projects that have high demand and less ready-to-move inventory. New phases of existing projects are also getting launched at higher prices.
Highest ever new launches recorded in 2023
Residential launches in 2023 at 2.94 lakh units are the highest ever surpassing the previous high of 2.81 lakh units in 2010. Compared with the previous year, new launches in 2023 witnessed a growth of 19% y-o-y. Around 33% of the launches in 2023 were in the price bracket of above ₹1.5 crore.
Unsold inventory declines. On a y-o-y comparison, larger residential markets of Delhi NCR and Bengaluru saw a decline in their unsold inventory levels by 19% and 16.8%, respectively.