The residential real estate sector is set to end the year with record sales of over 7 lakh units in terms of volumes and over ₹7-lakh crore in terms of value, as housing demand remains sustained despite price hikes and elevated mortgage rates.
2023 is expected to end with residential sales of 706,680 units, a rise of 8.7 per cent from 2022, according to data and estimates provided to businessline by data and analytics platform PropEquity.
In value terms, this would be 7.3 lakh crore, a 30.4 per cent increase from last year. “This may turn out to be the peak year for sales,” said PropEquity’s Founder and MD, Samir Jasuja.
In the first nine months of the year, more than 5.3 lakh units have been sold with a total value of ₹5.5 lakh crore, the data showed. PropEquity data covers 44 cities, and over 1.5 lakh projects of more than 52,000 developers.
“We find the residential sector doing exceedingly well, coming out of a long trough and 2022 onward it has been really phenomenal for the sector,” said Jasuja. He said the momentum looked like it would sustain next year as well but declined to give a projection.
After more than a decade, sales are running ahead of launches, sending inventory levels down to near lows of 17 months.
Slew of projects
Developers have lined up a slew of projects for the second half and the year is expected to end with new launches of 5.74 lakh units, but well short of the over 6.1 lakh units launched in 2022, which is the peak year for launches so far, Jasuja said.
According to Jefferies, the top seven listed developers are launching about 17 projects in the current quarter with a total area of 28 million square feet.
The highest number of launches are being seen in Hyderabad, Pune, and Thane, which have consistently seen launches of over 75,000 units each in the recent past. Pune is becoming an attractive alternative to Mumbai, while rapid infrastructure development in the Mumbai Metropolitan Region and connectivity to Mumbai city have resulted in an explosion of projects in Thane.
Post-pandemic, Hyderabad is experiencing a significant surge in demand, especially for larger units with 3 bedrooms, and developers adapting to the changing preferences. “Hyderabad has been steadily growing, and it has grown to 75,000 units from as low as 20,000 units 6-7 years back,” Jasuja said.
In the National Capital Region, Gurugram has seen close to three times rise in launches over the last 3-4 years, despite the prices that have doubled since the pandemic.
While tier-1 cities have the major share of launches and sales, tier-2 cities are also seeing demand growth. Of the total, tier- 1 cities are expected to see sales of 1.4 lakh units in 2023, a 7.7 per cent rise from last year while in terms of value it is just about ₹1 lakh crore up about a fourth.