New projects contribute to one-third of H1 2024 residential sales: Report

July 12, 2024: The number of residential units launched in the first half of 2024 reached a record high of 159,455, according to a JLL report. This translates to around 55% of the total units launched throughout the entire year of 2023. The supply of new residential projects has shown consistent growth this year.

The report mentioned that during the first half of 2024, the majority of the new residential projects launched were in the upper-mid segments (Rs 1-3 crore). However, there has been a significant growth in the share of premium and luxury segments compared to the same period in 2023. Developers have adapted their product launches and marketing strategies to meet changing buyer preferences, especially after the pandemic. As a result, there has been a noticeable increase in the supply of high-value projects in the past few quarters. In H1 2024, premium projects accounted for around 12% of new launches while luxury projects accounted for around 6%.

During Q2 2024 (April-June 2024), Bangalore, Mumbai and Delhi NCR emerged as the top cities in terms of new project launches, accounting for around 60% share. Interestingly, among the three metro cities, Delhi-NCR stood out with a significant 64% share in Q2 high-end launches (homes priced Rs 3 crore and above) as several prominent developers focused on launching luxury projects in Delhi NCR, particularly in Gurgaon.

India’s residential market soars to unprecedented heights

According to the JLL report, Bangalore witnessed the launch of 29,153 residential units while Chennai saw launches of 8,896 units.

Source: Real Estate Intelligence Service (REIS), JLL Research

Note: Mumbai includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai; Delhi NCR includes Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad and Sohna.

Data includes only apartments. Rowhouses, villas, and plotted developments are excluded from our analysis.

Samantak Das, chief economist and head of research and REIS, India, JLL, said, “The current year has witnessed an impressive increase in both launches and sales momentum, with approximately 54-57% of last year’s total volume already achieved in just half a year. The consistent growth can be attributed to the successful launch of strategically tailored products by developers who have carefully assessed market demand and dynamics. Interesting to note, sales momentum has successfully complemented the new launches with around 30% of the H1 2024 sales (154,921 units) being contributed by projects that got launched during the last six months. Listed and reputed developers, consistently bringing in a substantial supply over the past few years have played a key role in this growing trend”.

Premium residential market surges with 169% YOY increase in H1 2024

The report mentioned that projects with ticket size less than Rs 50 lakh saw launches of 13,277 units in H1 2024 compared to 16,728 units in H1 2023, witnessing a 21% decline. On the other hand, projects with ticket sizes of Rs 3 crore and Rs 5 crore saw launches of 19,202 units in H1 2024 compared to launches of 7,149 units in H1 2023, witnessing a 169% increase. Similarly, projects with ticket size of Rs 5 crore and above saw launches of 9,734 units in H1 2024 compared to launches of 4,510 units in H1 2023.

Siva Krishnan, senior managing director (Chennai & Coimbatore), head – residential services, India, JLL, said, “There has been a notable surge in launches within the premium segment (priced between Rs 3-5 crore) and luxury segment (priced above Rs 5 crore) compared to other segments. In H1 2024, launches in the premium segment surged by 169% Y-o-Y, followed by a 116% Y-o-Y increase in luxury segment launches. On the contrary, the mid segment projects (priced between Rs 50 lakh -1 crore) experienced a 14% Y-o-Y decline during the same period. This speaks about developers’ active response to the surge in demand for high value homes among the target clientele.”

Residential prices continue to move upwards

Q2 2024 continued to witness residential price growth in the top seven cities (Delhi NCR, Mumbai, Chennai, Hyderabad, Bangalore, Pune and Kolkata) of India, with Y-O-Y price increase ranging from 5% to 20%. The highest price increase was observed in Delhi-NCR, with a significant jump of approximately 20%, while Bangalore followed closely with around 15% increase.

While Bangalore has been witnessing around 15% growth Y-o-Y over the last few quarters, around 28% of its Q2 2024 new launches being sold out during the same quarter has acted as a driver for Y-o-Y price growth during the quarter. Furthermore, capital value increase at Whitefield and North Bangalore locations have acted as a catalyst. Availability of under-construction inventory in these cities getting restricted, is resulting in subsequent surge in prices. In response to the high demand for newly launched projects, developers are as well launching new phases of existing projects at elevated price levels, resulting in overall property price growth.

H1 2024 residential sales reached around 57% of total annual sales in 2023

Residential sales momentum continued to be on a high growth curve in the first half of 2024 driven by strong supply from reputed developers, favourable economic conditions, and positive buyer sentiments. The period recorded highest ever half yearly sales, with a remarkable 22% increase compared to the same period in 2023, totalling 154,921 units. This upward trajectory in demand paves the way for sustained growth in the residential market. Most of the cities witnessed robust y-o-y growth in sales volume with the markets of Bangalore, Mumbai, Pune, and NCR accounting for around 80% share in half-yearly sales.

In line with the trend observed in launches, in the first half of 2024, the sales of premium category projects (priced between Rs 3-5 crore) saw a remarkable y-o-y growth of around 160%. Similarly, the luxury segment (priced above Rs 5 crore) also experienced a significant sales increase of 60% compared to the same period in the previous year.

Months to liquidate the housing inventory declines by 20% YoY

The report mentioned that as of Q2 2024, unsold inventory across the seven cities increased marginally on a Y-o-Y basis as launches outpaced sales. However, it is interesting to note that months to sell has declined Y-o-Y from 30 months in Q2 2023 to 24 months in Q2 2024.

The report stated that the outlook for residential sales in 2024 remains positive, with an expected range of 315,000 to 320,000 units. This projection is based on the sustained growth momentum in the market. Additionally, supply is expected to match the demand as established developers are acquiring land in prime locations and growth corridors to launch their projects in the near to medium term. Some developers are also considering expanding their portfolio and entering new markets to increase their presence nationwide.