Sales Down 11% YoY, but Demand Outpaces New Launches

Mumbai, 26 September 2024: In a notable shift after a robust two-year period, residential real estate sales in the top seven Indian cities dipped by 11% year-on-year in Q3 2024, totaling approximately 107,060 units sold compared to 120,290 units in Q3 2023. Despite this decline, the market’s health remains intact as sales continue to outstrip new supply.

Mumbai and Pune Lead the Charge

The Mumbai Metropolitan Region (MMR) recorded the highest sales, with around 36,190 units sold, closely followed by Pune with approximately 19,050 units. Together, these two cities represented 52% of total sales in the quarter, underscoring their dominant position in the market.

New Supply Dips Below One Lakh for the First Time

New housing supply saw a significant decline of 19%, with only 93,750 units launched in Q3 2024, the first time it fell below the one lakh mark since Q1 2023. MMR led in new launches with about 29,615 units, while Bengaluru followed with approximately 15,915 units. Interestingly, both NCR and Chennai reported substantial increases of 53% and 51% in new launches, respectively.

Luxury Homes Dominate, Affordable Housing Lags

In terms of market segments, luxury housing (priced above INR 1.5 crore) constituted the largest share of new supply at 33%. Meanwhile, the affordable housing segment saw its lowest share at just 13%, highlighting a shift in developer focus towards higher-end properties.

Existing Inventory Declines Amid Strong Sales

The total available inventory across the top seven cities fell by 8% year-on-year, decreasing from over 610,000 units in Q3 2023 to approximately 564,000 units in Q3 2024. This decline is largely attributed to robust sales outpacing new launches.

Prices Surge as Market Stabilizes

Average residential prices in these cities rose sharply, with a collective increase of 23% year-on-year. Hyderabad led with a staggering 32% growth, while Bengaluru and NCR both experienced 29% rises. Anuj Puri, Chairman of ANAROCK Group, notes, “High prices and seasonal factors contributed to the tapering of sales in Q3, but the market is stabilizing after reaching a peak in early 2024.”

Looking Ahead: Festive Quarter on the Horizon

As the festive quarter approaches, developers are expected to unveil numerous projects, aiming to rekindle buyer interest. Puri suggests that while growth may not reach the heights of previous years, strategic discounts and offers could entice potential buyers back into the market.

A Market in Transition

While the decline in sales and new launches may raise concerns, the overall resilience of the housing market signals a phase of consolidation. With shifting buyer preferences and price adjustments, the next quarter may provide valuable insights into the future trajectory of India’s residential real estate landscape.