Residential sales reach 15-yrs high, anticipate record-breaking year

12 Jul 2023 CW Team

The second quarter stood out with over 64,500 units sold, signifying a significant 4 per cent quarter-on-quarter growth. Notably, residential sales have consistently set new records in each successive quarter over the past year. Consequently, the second quarter surpassed the previous historic high achieved in the first quarter, making it the highest quarterly sales since 2008, according to JLL. The consultancy firm predicts that 2023 is poised to be a record-breaking year for the residential market in India.

The city with the highest residential sales was Bengaluru, recording 26,625 units sold. Mumbai followed closely with 26,188 units and Pune with 25,201 units.

The spike in sales was primarily driven by Hyderabad and Pune, which experienced a 69 per cent and 50 per cent increase, respectively, in the first half of 2023. Hyderabad witnessed a surge from 9,449 units sold in the first half of 2022 to 15,925 units in 2023. In Pune, sales rose from 16,802 units to 25,201 units.

Chennai also experienced a healthy increase in sales, with a 47 per cent jump from 4,968 units to 7,319 units. JLL attributed the revitalisation of the residential market to the government's strong support, coupled with the Reserve Bank of India's decision to pause the repo rate in recent instances, along with moderate inflation. Siva Krishnan, senior managing director and head of Residential, India at JLL, mentioned that the upcoming festive season and positive customer sentiment will likely contribute to further growth in the second half of the year.

Interestingly, ongoing projects launched before 2018 and nearing completion is also gaining traction. Developers' focus on completing these projects on time has generated increased interest among buyers. Approximately 12 per cent of sales in the first half of 2023 were attributed to projects launched before 2018, according to JLL.

Various factors have contributed to this surge in sales, including pent-up demand, increased desire for homeownership following the pandemic and overall economic revival, as stated by Atul Bansal, director of Finance at Omaxe.

Sales were highest for homes priced between Rs 5 million and Rs 7.5 million, reaching 30,125 units in the first half of the year. Homes priced above Rs 15 million followed closely with 26,011 units sold, and those priced below Rs 5 million reached 24,482 units.

The most significant sales growth, at 67 per cent, was observed in the range of homes priced between Rs 10 million and Rs 15 million.

Mohit Jain, managing director at Krisumi Corporation, commented on the remarkable transformation of the luxury real estate market in India in recent years. He noted that the top residential markets in the country have consistently performed well, with sales showing an upward trend in recent quarters. This growth can be attributed to strong demand across all price brackets, particularly in the mid and premium housing segments. The desire to own properties and the stability of home loan interest rates have further fuelled the sales momentum, according to Jain.

According to data released by real estate consultancy JLL, home sales in India reached a 15-year high of 126,587 units in the first half of 2023, marking a 21 per cent increase compared to the same period last year. The sales surge can be attributed to the resilient domestic economy and a stable job environment, as stated by JLL. Each quarter, spanning from January to March and April to June, witnessed over 62,000 homes being sold.The second quarter stood out with over 64,500 units sold, signifying a significant 4 per cent quarter-on-quarter growth. Notably, residential sales have consistently set new records in each successive quarter over the past year. Consequently, the second quarter surpassed the previous historic high achieved in the first quarter, making it the highest quarterly sales since 2008, according to JLL. The consultancy firm predicts that 2023 is poised to be a record-breaking year for the residential market in India.The city with the highest residential sales was Bengaluru, recording 26,625 units sold. Mumbai followed closely with 26,188 units and Pune with 25,201 units.The spike in sales was primarily driven by Hyderabad and Pune, which experienced a 69 per cent and 50 per cent increase, respectively, in the first half of 2023. Hyderabad witnessed a surge from 9,449 units sold in the first half of 2022 to 15,925 units in 2023. In Pune, sales rose from 16,802 units to 25,201 units.Chennai also experienced a healthy increase in sales, with a 47 per cent jump from 4,968 units to 7,319 units. JLL attributed the revitalisation of the residential market to the government's strong support, coupled with the Reserve Bank of India's decision to pause the repo rate in recent instances, along with moderate inflation. Siva Krishnan, senior managing director and head of Residential, India at JLL, mentioned that the upcoming festive season and positive customer sentiment will likely contribute to further growth in the second half of the year.Interestingly, ongoing projects launched before 2018 and nearing completion is also gaining traction. Developers' focus on completing these projects on time has generated increased interest among buyers. Approximately 12 per cent of sales in the first half of 2023 were attributed to projects launched before 2018, according to JLL.Various factors have contributed to this surge in sales, including pent-up demand, increased desire for homeownership following the pandemic and overall economic revival, as stated by Atul Bansal, director of Finance at Omaxe.Sales were highest for homes priced between Rs 5 million and Rs 7.5 million, reaching 30,125 units in the first half of the year. Homes priced above Rs 15 million followed closely with 26,011 units sold, and those priced below Rs 5 million reached 24,482 units.The most significant sales growth, at 67 per cent, was observed in the range of homes priced between Rs 10 million and Rs 15 million.Mohit Jain, managing director at Krisumi Corporation, commented on the remarkable transformation of the luxury real estate market in India in recent years. He noted that the top residential markets in the country have consistently performed well, with sales showing an upward trend in recent quarters. This growth can be attributed to strong demand across all price brackets, particularly in the mid and premium housing segments. The desire to own properties and the stability of home loan interest rates have further fuelled the sales momentum, according to Jain.