Vikas Wadhawan, Group CFO, Housing.com, PropTiger.com and Makaan.com
The Indian residential real estate market is on a remarkable trajectory, defying odds and surpassing expectations in the face of challenges. Despite factors such as increased mortgage rates and property costs, the demand for residential properties in India continues to soar, reaching heights that even pre-pandemic levels couldn’t anticipate. This impressive trend reflects the industry’s resilience, as well as the evolving aspirations and preferences of homebuyers.
According to Vikas Wadhawan, Group CFO of Housing.com, PropTiger.com, and Makaan.com, the top 7 cities in India are set to witness sales of over 262,000 units in 2022. This is a testament to the enduring strength of the housing market, which has navigated through various disruptions including demonetisation, RERA implementation, GST changes, and the global pandemic.
The resurgence of the real estate sector is underscored by recent data from PropTiger.com, which reveals not only a surge in demand but also a notable rise in new supply. In fact, for four consecutive quarters, the residential real estate market has witnessed an influx of over 100,000 new units. The period from April to June 2023 saw an 8% year-on-year increase in residential unit sales, coupled with an 11% growth in new supply across eight major cities in India.
This consistent demand surge is a clear reflection of the strong desire for homeownership among the populace. This sentiment is instilling confidence in developers, leading to the launch of an impressive 113,770 new units in the second quarter of 2023 alone. This has contributed to a total new supply of 261,570 units in the first half of 2023, marking a decade-high record for new launches.
Notably, this surge in demand is not isolated to specific cities; it’s a phenomenon spanning all major urban centers. Among these cities, Mumbai and Pune are emerging as frontrunners, accounting for a substantial 61% of the overall market share in the last quarter. In Q2 2023, these cities saw a remarkable growth of 80,250 units sold, an 8% increase from the same period the previous year.
In terms of pricing trends, Q2 2023 has seen a noteworthy concentration of new supply within the Rs 45-75 lakh price bracket, accounting for 33% of total launches. This underscores a robust demand for affordable yet high-quality housing options, aligning with the aspirations of homebuyers seeking value and comfort.
Furthermore, there’s a significant increase in the share of units priced above one crore. This segment has grown from 14% in 2019 to a remarkable 29% in Q2 2023. This suggests a burgeoning group of homebuyers willing to invest in premium properties, possibly due to rising disposable incomes and a preference for luxury amenities.
Developers are strategically focusing on 2 BHK and 3 BHK configurations, acknowledging the evolving preferences of homebuyers who seek more spacious living areas. This shift is attributed to factors such as the rise of remote work, changing lifestyles, evolving family dynamics, and a quest for enhanced living spaces.
The Indian real estate industry is experiencing an exceptional rebound, with a surge in both demand and supply. The market’s ability to surpass pre-pandemic sales levels is a testament to its resilience and adaptability. As homebuyers’ preferences shift towards specific price brackets and larger configurations, the industry continues to evolve to meet their changing needs and aspirations.
