Residential Property Sales Reach Decade High; Mumbai Sees 17% Surge In Q1FY24
Knight Frank report shows 29 per cent annual sales growth since 2020, record highs in 2023 and Mumbai's leading performance in Q1FY24
Post the epidemic, India's residential real estate market has shown resilience. As per a report on India's residential market– Q1 2024 by Knight Frank, a London-based residential and commercial property consultancy firm, annual sales growth of 29 per cent since 2020 and sales volumes reached a decade high in 2023.
Sales increased by 9 per cent year on year in Q1 2024, with Mumbai leading the way with a 17 per cent increase and high demand for premium apartments. Kolkata experienced an 89 per cent increase in new units, although mid-segment sales stalled due to affordability concerns. With Hyderabad up 13 per cent, prices witnessed an increase. However, a 4 per cent rise in unsold inventories difficulties continues to exist.
The residential market has been consistent since 2020, with an annual sales growth rate of 29 per cent. As the report states, the sales volumes hit a 10-year high in 2023, showcasing an increase in the confidence have and the existence of a stable economy.
Sales have risen by 9 per cent year on year in the first quarter of 2024, with Mumbai on top of the list with a 17 per cent increase in units sold. This growth was principally driven by a surprising 51 per cent year-on-year rise in sales of flats priced over Rs 10 million, demonstrating a desire for high-end accommodation. In contrast, Bengaluru experienced a slight decline of 2 per cent in sales, highlighting localised challenges within the market.
Kolkata witnessed an 89 per cent year-on-year increase in units launched, setting a record high of 6,021 units entering the market.
The report stated that the market's response to varying price segments has been mixed. While demand for high-ticket homes increased, with sales in the Rs 10 million and above category up 51 per cent year on year, the mid-segment market saw a short slowdown. Sales of units priced between Rs 5 and 10 million and below Rs 5 million fell by 10 per cent and 6 per cent, respectively, as affordability worries and rising home loan rates affected customer decisions.
Prices in Hyderabad rose 13 per cent year on year, hiked due to a trend towards luxury high-rise buildings. According to the survey, homebuyers choose ready or near-ready inventory to avoid the risks associated with project delays, which have previously affected the sector.
The research also outlines some of the sector's problems. The increase in unsold inventory by 4 per cent year-on-year suggests a market adjusting to new dynamics, where developers are balancing supply with fluctuating demand. The current Quarter-to-Sales (QTS) ratio of 5.9, which is up from 6.7 the previous year, demonstrates continuous market changes. The research also states that stakeholders in India's residential industry remain cautiously hopeful about the future.
