The real estate industry in India has experienced a noteworthy upswing in 2023. The residential market in the country, recognized for its growth potential, has resiliently defied odds and demonstrated robust revival figures, withstanding even the gradually increasing home loan interest rates and the continuing global economic constraints. Let’s delve into the numbers and trends that have characterized this interesting period.
The third quarter of 2023 (July-September) saw a total of 1.23 lakh new housing units launched, bringing the cumulative new supply for the first nine months of the year to an impressive 3.4 lakh units.
This notable number not only highlights the sector’s impressive resilience in the face of global challenges but also signals a strong resurgence in residential growth. With growing interest in owning homes creating a consistent demand for housing, developers have been prompted to initiate projects that were postponed during the uncertain aftermath of the pandemic. This positive trend in the market, buoyed further by the festive season, has essentially resulted in an increased number of new housing units being launched during the period.
Which cities are leading the tally in new supply?
During Q3 2023, Mumbai, Pune, and Hyderabad have positioned themselves as leading contenders, exerting dominance in the landscape of residential supply. Together, these metropolitan centres accounted for a significant share of 63 percent of the total number of new units launched in the top eight cities of the country.
Mumbai, on its own, held a noteworthy share of 29 percent in the overall new property launches nationwide, while both Hyderabad and Pune accounted for a substantial 17 percent share each. The cosmopolitan character of Mumbai, coupled with its economic opportunities, continued to attract investment and interest. On the other hand, Pune and Hyderabad have been making significant strides towards consolidating themselves as key residential hubs, as well, given their stronghold on the IT sector.
New launches largely targeting the high-end budget segment
Majority of the new supply during Q3 2023, a notable 44 percent, was concentrated in the INR 1 crore and above price bracket, followed by units in the budget category of INR 45-75 lakh, that accounted for 26 percent of the total new supply.
The emphasis on higher-priced properties signifies a market trend where developers are strategically targeting the affluent demographic or premium property seekers. Post the pandemic, individuals in the housing market are increasingly desiring larger residences in preferred neighbourhoods, with upscale features. Besides, luxury housing being primarily defined by generous floor space, translates into higher cost of the residence. The findings from our latest survey on consumer sentiment affirm this pattern, emphasizing an increasing preference for transitioning to more expansive living spaces, especially in light of the work-from-home and hybrid work scenarios.
Simultaneously, the mid-end housing segment with units falling in the INR 45-75 lakh price range has emerged as another significant player in the new supply dynamics. This suggests a dual strategy employed by developers, catering to both the luxury market with higher-priced offerings and a broader demographic with more moderately priced options.
Conclusion
The Indian real estate market's performance in the first nine months of 2023 strongly reflects its resilience, adaptability, and potential for growth. The distribution of new launches across both luxury and mid-end price segments depicts a nuanced approach to meet diverse consumer demands and preferences. As the nation progresses along its path of economic recovery and transformation, the real estate sector stands poised to assume a prominent role. Given the rapidly evolving urban landscape, the residential segment would do well to foster sustainable development and work towards making the dream of homeownership a reality.
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