In the dynamic landscape of India’s real estate sector, the third quarter of 2023 stands as a testament to resilience and growth. Across the top eight cities, a remarkable surge in both residential demand and supply has set the tone for a promising trajectory in the property market. With new launches surpassing the one-lakh mark for the sixth consecutive quarter and sales witnessing a robust 22 per cent increase, the sector demonstrates unwavering momentum.
A notable trend in Q3 2023 is the concentration of both demand and supply in higher price brackets, indicating a shift towards aspirational living and preference-driven purchases. However, amidst this surge, a significant portion of homebuyers, comprising 52 per cent, faces challenges in finding properties within their desired price range. This gap primarily stems from the scarcity of ready-to-move-in properties in the primary market, echoing the preferences of nearly 80 per cent of prospective buyers.
The heightened demand for ready-to-move-in properties, coupled with burgeoning investor interest and escalating input costs, has led developers to impose premiums, propelling prices upward. Despite this surge, the real estate sector continues to attract investors and end-users alike, emerging as a preferred asset class over traditional options like gold and stocks.
Looking ahead to the upcoming quarter, optimism pervades the market, fueled by the onset of the festive season. Historical data underscores the peak in consumer activity during festivities, with a substantial share of yearly sales occurring in the final quarter and the subsequent first quarter. With property demand already at 87 per cent of 2022 levels and the buoyant sentiments of homebuyers, the year is poised to conclude on a positive note.
Sales – Key Insights:
- In Q3 2023, property demand across the top-eight cities has grown by 22 per cent year-on-year, with a total of 1,01,220 units sold during this period.
- Majority (48 per cent) of the demand was concentrated in Mumbai and Pune in Q3 2023. Locality-level analysis reveals that peripheral localities in Mumbai such as Thane West, Dombivli and Panvel took highest share in overall sales across top metros in third quarter of 2023.
- Majority of residential sales in Q3 2023, comprising 31 per cent, were concentrated in the above INR 1 crore price bracket, closely followed by the INR 45-75 lakhs price bracket, which accounted for a 24 per cent share. Notably, this segment has out passed its share in the overall sales tally this quarter highlighting homebuyers’ interest in buying property with high ticket size.
- While the growth in demand has surpassed that in supply in Q3 2023, the demand-supply mismatch for the limited ready-to-move-in properties persists. In line with this, 52 per cent homebuyers have opined that they are unable to find a right product that align with their preferences and budget in the market as per our consumer and market insights.
- To dwell deeper, 59 per cent of the prospective homebuyers are looking for ready-to-move-in (RTMI) properties, however only 19 per cent of the total available new properties fall in this category. Influx of ready homes aligning with the preferences of homebuyers will be crucial to capture the pent-up demand in the market.
- Overall, the sustained demand momentum in past three quarters of 2023, and property sales already being 87 per cent closer to the preceding year, signal for the year to end on a higher note than 2022.
