New Supply Surge in Homes: Where Does Your Budget Fit in?

The residential market of the country, known for its potential for growth, has demonstrated its strength by defying the odds that had risen during the pandemic and posting impressive revival figures.

The second quarter of 2023 (April-June) saw a staggering total of 1.13 lakh new housing units launched, bringing the cumulative new supply for the first half of 2023 to an impressive 2.6 lakh units.

This remarkable figure not only showcases the sector’s remarkable resilience amidst global challenges but also establishes a new milestone. Increased interest in homeownership has generated a sustained demand for housing, motivating developers to launch their projects that were delayed during the uncertain aftermath of the pandemic.

Cities in western India lead the list in new supply

The cities in the western part of the country, viz. Mumbai, Pune, and Ahmedabad have emerged as prominent frontrunners, dominating the supply landscape during Q2 2023. These urban centres collectively contributed to a substantial 72 percent of the total new property launches across the top eight cities in the country. Mumbai alone accounted for a substantial 29 percent of the overall new property launches across the nation. This signifies the city’s steady charm for both developers and homebuyers alike. The cosmopolitan nature of Mumbai, its economic opportunities, and cultural richness have once again demonstrated their ability to draw investment and interest.

Price segmentation promote home ownership in the mid-end budget category

The period Q2 2023 witnessed a nuanced distribution of new property launches across various price brackets.

Majority of the new supply, a notable 33 percent, was concentrated in the INR 45-75 lakh budget category.

This price range, often considered affordable for a large section of the population, resonates well with the rising aspirations of middle-class homebuyers, denoting a move towards making homeownership more accessible to a wider demographic.

On the other hand, residential units priced above INR 1 crore captured a significant share of almost 29 percent. This depicts the fact that despite the focus on affordability, there is still a robust demand for high-end properties catering to those with substantial purchasing power. Developers, thus, are observed to be striving to cater to both mid-end and high-end segments, striking a delicate balance between accessibility and luxury.

2BHK homes emerge most preferred unit configuration

During Q2 2023, developers concentrated on the appeal of 2 BHK configurations, that accounted for a sizable 39 percent of the total new housing supply. Following closely, 3 BHK homes secured a notable 31 percent share. This trend underscores the developers' judicious response to shifting consumer preferences for practical and comfortable living spaces. The popularity of these configurations can be attributed to their versatility, catering to a wide range of households, from small families to those seeking additional room for workspaces.

Our recent consumer sentiment survey echoes this trend, highlighting a growing inclination towards upgrading to more spacious living arrangements, particularly in response to the work-from-home and hybrid work dynamics.

In conclusion, the Indian real estate market's exceptional performance in the first half of 2023 speaks volumes about its resilience, adaptability, and potential for growth. The diverse distribution of new supply across price ranges mirrors the market's efforts to cater to a wide spectrum of homebuyers. As the nation continues its journey of economic recovery and transformation, the real estate sector is poised to play a pivotal role in shaping the urban landscape and fulfilling the dream of homeownership for millions.

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