After growing by leaps and bounds for nearly three years post-pandemic, India’s residential real estate market seems to be entering a slow lane again. The market which has been mired by poor demand, financial irregularities and non-delivery of flats for nearly a decade leading up to 2020, has again registered declining sales in the September quarter.
Latest data from Anarock Research shows home sales in the July-September period declined 11% year-on-year to some 107,000 units in the top seven markets in India. The figure was 11% lower sequentially, as well, from the Rs 120,300 units sold in the previous quarter. This was the first such decline in home sales in nearly four years.
During the period, home sales in Hyderabad declined the most and it was 16% lower than the previous quarter, while a whopping 22% decline year-on-year. Incidentally, Hyderabad has been the fastest-growing housing market in the country for quite some. Another high-growing market in recent times – Pune recorded a 17% dip in sales over the same quarter the previous year, while its sales declined 10% sequentially.
The country’s largest housing market Mumbai Metropolitan Region (MMR) showed signs of distress too as sales fell 13% sequentially and 6% year-on-year. While the market in Kolkata reported 1 25% dip in sales over the last year same quarter and 14% decline sequentially.
“All the top cities individually recorded a dip in housing sales. The top 7 cities also witnessed a drop in new housing supply, with approx. 93,750 units launched in Q3 2024 against 1,16,220 units in the corresponding period in 2023 – a 19% annual drop,” says Anuj Puri, Chairman, Anarock Group.
According to him, housing sales in Q3 “tapered down amid high prices and the monsoon season”. Data shows, average residential home prices in the top seven cities collectively saw double-digit growth of 23% in Q3 2024 against Q3 2023. Hyderabad recorded the highest 32% annual growth, followed by Bengaluru and NCR with 29% increases each.
In terms of budget, the Rs 1.5 Cr and above price segment recorded the highest new supply of 33%, followed by the premium (INR 80 lakh – INR 1.5 Cr) segment with a 30% share. The mid segment (INR 40– 80 lakh) contributed a 23% share of the total new supply during the quarter, while the affordable segment’s share fell further to just 13% – the lowest in a quarter.”
As home sales declined, realtors also cut down on their new launches. During the quarter, new launches in the top seven markets declined 19% year-on-year to 93,750 units, down from 116,220 units in Q3, 2023. While it fell 20% sequentially.
With the festive season now begging, experts like Puri expects some uptick in activities during the October-December quarter. Developers have several projects lined up during the festive quarter, during which the market is expected to see an uptick in demand, he says. However, “growth in the upcoming quarters may not be as steep as seen in the last 1-2 years. Residential prices too seem to have peaked out and are now gradually stabilizing across cities. Developers are likely to roll out several offers and discounts during the upcoming festive quarter to attract buyers.”