Looking For a New Home This Year? Know the Ticket Size That Has the Highest Supply

The residential market in the country maintained its upward trajectory as it commenced the new year of 2024, with first-quarter sales witnessing a robust 41 percent year-on-year increase. Furthermore, approximately 1 lakh new housing units were introduced during Q1 2024 across the leading eight cities. While there was a substantial release of pent-up supply in the initial two years post-pandemic, the pace has moderated somewhat, evident in a 30 percent decline in new property launches compared to the corresponding period last year. However, it’s essential to highlight that this trend is specific to the mentioned quarter alone.

Ticket Size Split of New Supply in Q1 2024

A detailed analysis of the budget-wise distribution of new residential supply in the first quarter of 2024 in the key eight cities of the country reveals some interesting patterns, indicating evolving preferences among developers and homebuyers. Properties priced below INR 25 lakh accounted for a modest 8 percent of the total supply, while homes in the budget segment ranging from INR 25-45 lakh comprised 13 percent. Residential units in the INR 45-75 lakh bracket captured 23 percent share, followed closely by properties priced between INR 75-100 lakh, constituting 20 percent of the supply. Remarkably, the high-end segment, commanding prices above INR 1 crore, saw a significant surge, capturing the largest share of 36 percent.

Decline in Homes in the Low-to-Mid Segment Supply While High-End Segment Sees Increase

A notable aspect of the Q1 2024 supply scenario is the significant decline in properties priced below the INR 45 lakh bracket. This segment, which accounted for a substantial 50 percent share in Q1 2019, has dwindled to a mere 21 percent in the current quarter. Conversely, the segment comprising properties priced at INR 1 crore and above has witnessed a remarkable increase, commanding a substantial 36 percent share in Q1 2024. This marks a significant rise from its previous share of just 14 percent in Q1 2019.

Thus, while the decline in housing properties in the ticket size range of less than INR 45 lakh underscores a shift in focus among developers away from the lower-priced segment, the upward trajectory of high-end residential supply highlights changing consumer preferences and market dynamics.

Regional Concentration and Market Dynamics

A closer examination of the data reveals that nearly half of Q1 2024's residential supply is concentrated in Mumbai and Hyderabad. These metropolitan areas exhibit a pronounced preference for properties in the over INR 1 crore price bracket.

This geographical concentration stresses the influence of regional market dynamics on overall supply trends. Additionally, homebuyers are now choosing homes based on lifestyle rather than just price, and developers are taking notice. They are adjusting their product and pricing strategies to offer properties with top-notch amenities, meeting the lifestyle aspirations of buyers.

Anticipated Trends and Future Outlook

Looking ahead, it is anticipated that the next wave of new supply will enter the market in the latter half of the year. Developers are actively positioning themselves in the top eight cities, indicating optimism about future market prospects. However, the evolving supply dynamics also present challenges and opportunities for stakeholders to adapt to changing market conditions and cater to the evolving needs of homebuyers.

In conclusion, the analysis of the Q1 2024 real estate supply scenario in India unveils a nuanced landscape characterized by shifts in budget-wise distribution. The decline in low-to-mid segment supply juxtaposed with the rise of high-end properties reflects changing market dynamics and consumer preferences. As the market continues to evolve, stakeholders must remain agile and responsive to emerging trends to effectively navigate the complex terrain of the real estate sector.

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