Residential Market Trends in 2023: Taking A Closer Look

The residential market of the country has witnessed substantial growth in recent times, and the numbers from Q2 2023 only reinforce this trend. A combination of government support and low interest rates during the pandemic, shifting buyer preferences, increased savings, and technological advancements have helped fuel the post-pandemic recovery of the residential market, making it a robust and dynamic sector. With the conclusion of a better part of 2023, it can be safely stated that the primary residential markets showed notable strength and expansion during the year, even in the face of persistent economic challenges on a global scale.

Record-Breaking New Supply

A significant number of 113,770 units entered the market in Q2 2023, bringing the total new supply for the first half of the year to 261,570 units. This marked the highest level of new launches in a decade, reflecting the growing confidence of developers and investors in the residential market.

While new supply soared by a remarkable 43 percent when compared on a semi-annual basis, sales observed an impressive growth rate of 15 percent. Amongst the top-8 cities in India, all witnessed sales growth in H1 2023, except for Bengaluru and Kolkata, as compared to H1 2022.

Sustained Market Growth

On a year-on-year basis, comparing Q2 2023 to Q2 2022, both new supply and sales have registered fair growth rates, to the tune of 11 percent and 8 percent respectively. This steady growth over the past year indicates that the market momentum observed is not a transient trend but rather a sustained surge.

Mumbai and Pune Leading the Way

Mumbai, followed by Pune, emerged as the frontrunners - both in terms of new supply and sales during Q2 2023.

Mumbai, often referred to as the financial capital of India, claimed the lion's share, accounting for 29 percent of the overall new launches in Q2 2023 - depicting Mumbai's resilience and continued appeal to both developers and homebuyers. Pune followed Mumbai as the region witnessing the second highest infusion of new supply during the period, accounting for 23 percent share of the total number of units launched. On the sales front, Mumbai and Pune continued to be the star performers, together accounting for a remarkable 61 percent of overall sales in Q2 2023.

Focus on Mid-segment Housing

The residential market in Q2 2023 showcased a wide array of options, with a notable emphasis on properties falling within the INR 45-75 lakh price range, representing 33 percent of total new launches.

Interestingly, units priced at more than INR 1 crore also accounted for a substantial 29 percent share in the total new supply. The trend seen towards mid-range and high-end market segments illustrates the market's variety and its capacity to meet the needs of a broad spectrum of buyers, each having individual preferences and financial resources. In response to this demand, developers are coming up with properties that cater to both these segments concurrently.

On the sales front, a major share of 27 percent was accounted for by properties in the INR 45-75 lakh price bracket. In a close second, properties priced at over INR 1 crore made up 25 percent of the total sales, demonstrating the market's ability to accommodate different budget limitations and interests of buyers.

Conclusion

Summing up, the country’s residential market performance in 2023 has been quite noteworthy. Record-breaking new supply, sustained sales growth, and city-wise resilience demonstrate that the sector is on a steady growth trajectory. With a diverse range of offerings across different price points, the market continues to attract both developers and homebuyers, solidifying its position as a key driver of India's economic growth.

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