The residential sector in the nation has experienced significant growth in recent months, and our data from Q3 2023 emphasizes this upward trajectory. Factors such as governmental support, favourable interest rates amid the pandemic, changing buyer preferences, increased savings, and technological advancements have collectively contributed to propelling the post-pandemic recovery of the residential market, rendering it a resilient and dynamic industry. As a substantial portion of 2023 concludes, it is evident that the primary residential markets have displayed considerable resilience and growth throughout the year, even in the face ongoing global economic challenges.
Favourable Growth Statistics
During the third quarter of 2023, the residential real estate sector experienced a noteworthy influx of 123,080 units into the market, showcasing a substantial 17 percent year-on-year growth in new supply. In tandem with this surge in supply, the sales performance in Q3 2023 demonstrated a remarkable year-on-year uptick of 22 percent, with a total of 101,221 units successfully sold.
While the improvement in new supply of housing units is indicative of a robust and expanding market, underlining the sustained confidence of both developers and investors in the residential real estate sphere, the growth in sales further emphasizes the positive sentiment prevailing in the market, indicating a healthy demand for residential properties. The substantial growth in both new supply and sales not only underscores the resilience of the residential real estate sector but also reflects the enduring optimism that stakeholders of the industry continue to place in the market's potential for growth and stability.
Key Cities Showcasing Growth
The third quarter of 2023 saw Mumbai take the lead in terms of both new supply and sales, with Pune and Hyderabad following.
Mumbai, recognized as India's financial hub, secured the largest share by accounting for 30 percent of the total new launches in Q3 2023. Following Mumbai, Pune emerged as the second-highest contributor to the new supply, its share pegged at 17 percent. In terms of sales, too, Mumbai and Pune maintained their robust performance, collectively constituting 48 percent of the overall sales in Q3 2023. This indicates the sustained popularity and market strength of both cities, reaffirming their status as key players in the real estate sector.
Meanwhile, Hyderabad emerged as another notable player in the residential real estate landscape during Q3 2023, closely trailing behind Mumbai and Pune in both new supply and sales.
The city's contribution is underscored by its 17% share in the total new supply, denoting a substantial infusion of housing units into the market. On the sales front, Hyderabad accounted for 14% of the total units sold during Q3 2023, buoyed largely by the residential demand emanating from the influx led by the robust growth of the IT/ITeS sector in the city. This highlights Hyderabad's growing prominence, showcasing the city as a key contender in the country’s real estate scenario.
Focus on Luxury and Mid-segment Housing
Majority of the new supply and sales during Q3 2023 was concentrated in the INR 1 crore and above price bracket, followed by units in the budget category of INR 45-75 lakh.
This suggests a nuanced approach to meet the varying preferences and purchasing power of homebuyers, balancing upscale offerings with more moderately priced options.
Conclusion
In summary, the residential market in the country has exhibited remarkable performance in 2023. Noteworthy increases in new supply, consistent growth in sales, and the resilience of cities collectively indicate a stable upward trend for the sector. The market's ability to cater to diverse preferences and budgets, along with its capacity to attract both developers and homebuyers, reinforces its pivotal role as a driving force behind India's economic growth.
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