Indian residential realty has maintained its upward course since the beginning of 2022, even amidst global uncertainties. In the third quarter of 2022, both demand and supply in the top-eight cities have recorded double-digit growth and are at par with pre-pandemic levels. Residential demand registered a robust growth of 49 per cent in the July-September quarter. The positive homebuyer sentiments along with the festive season, have encouraged developers to launch new projects. In fact, the historical analysis suggests that the new supply is at par with the pre-RERA levels of 2015 for the second consecutive quarter.
Although the demand has sustained momentum, our insights suggest that there is a gap between consumer demand and the available product in the residential market. Our consumer sentiment survey suggests that 58 per cent of homebuyers are searching for ready-to-move-in (RTMI) properties. However, only 21 per cent of the available 7.85 lakh inventory falls in RTMI category and such units are being sold at a premium on the back of current supply and demand dynamics.
Although the overall trajectory of demand and supply witnessed during January-September 2022, suggests that the residential markets are on the cusp of a cyclic upswing post the downturn witnessed during the last decade. In short term, the festive thrust will continue to drive home searches which will culminate in purchases in the next two quarters.
With increased focus on health and well-being, projects offering both habitability and affordable will be most preferred by homebuyers. While the hike in prices and ending of accommodative stance and lack of market stimuli such as stamp duty waivers loom large over the homebuyer sentiments, according to PropTiger Research, this impact will be short-lived as pandemic-induced importance of buying a home amongst end-users along with hybrid working model will continue to drive demand in the coming months.
Below are the trends and insights of the property markets in the top-eight cities of India for July-September 2022 quarter:
- A total of 1,04,820 units were launched in Q3 2022. New launches are at par with the 2015 (pre-RERA) levels.
- New supply registered a YoY growth of 61 percent when compared to Q3 2021. On a QoQ basis, the new supply grew by 3 per cent.
- Mumbai has been the frontrunner in terms of new supply, taking a share of 28 per cent in the overall new launches, closely followed by Hyderabad with took a share of 26 per cent in the new supply in Q3 2022.
- In the case of demand, a total of 83,218 units were sold in Q3 2022 as compared to 55,907 units sold in Q3 2021 – registering a 49 per cent YoY growth.
- On a QoQ basis, residential sales have grown by 12 per cent in July-September 2022 quarter.
- Mumbai and Pune continue to record maximum traction, taking a combined share of 53 percent in overall sales in Q3 2022.
- Weighted average prices for new supply and inventory across the top-eight cities have appreciated by 3-9% YoY in Q3 2022.
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