The third quarter of 2023 revealed a significant shift in India's Tier 1 city housing market. According to PropEquity, unsold housing units decreased by 11%, dropping from 5,26,497 units in Q3 2022 to 5,08,464 units in Q3 2023. This reduction marked a positive trend, reflecting increased property sales and a more balanced supply-demand equation. However, the story varied across cities. Hyderabad saw a 6% increase in unsold housing stock, while the Delhi-NCR region witnessed a 7% decline. New property launches increased by 2%, totalling 97,871 units, but rising property prices and mortgage rates led to an 11% decline in new launches. As market dynamics evolve, experts anticipate housing demand growth if interest rates remain stable or decrease in the coming months. The festive season is expected to boost new property launches and culminate in a resilient real estate market by the year-end.
The third quarter of 2023 witnessed a noteworthy shift in the landscape of unsold housing stocks in India's Tier 1 cities. According to research data from PropEquity, there was a remarkable 11 percent reduction in unsold housing units, which declined from 5,26,497 units in Q3 2022 to 5,08,464 units in Q3 2023. This decline in unsold inventory showcased a positive trend in the real estate market, signifying increased property sales and a more balanced supply-demand equation.
However, the narrative was not uniform across all cities. Hyderabad, one of India's burgeoning metropolises, experienced an unusual 6 percent increase in unsold housing stock during Q3 2023 among the country's top seven cities. In contrast, the Delhi-NCR region exhibited a 7 percent reduction in unsold inventory during the third quarter of 2023, compared to the preceding quarter. This decline in unsold units coincided with a continued upward trajectory in residential property sales, a testament to the market's resilience following the challenges posed by the Covid-19 pandemic.
In the realm of new property launches, Tier 1 cities saw a 2 percent increase, totalling 97,871 units introduced in July–September 2023. However, this quarter also witnessed an 11 percent decline in new launches, driven by rising property prices and mortgage rates, which dampened demand. Indian real estate developers have shifted focus, prioritizing reducing old unsold inventory and launching fewer new projects to balance supply and demand.
In contrast, Thane experienced a 2 percent decrease in new launches, a 2 percent drop in total absorption, and a substantial 14 percent decline in unsold housing units. Pune, another prominent city, reported a 3 percent increase in total absorption and an impressive 12 percent decrease in unsold stock on a quarter-on-quarter basis. Mumbai witnessed a 24 percent decrease in new property launches and a substantial 19 percent decline in total absorption during the third quarter of 2023.
Bengaluru, on the other hand, witnessed a 24 percent surge in new launches and a 13 percent increase in total absorption on a quarter-on-quarter basis. Delhi NCR, a region known for its robust real estate market, experienced a surge in new residential unit supply, with various developers launching 5,450 units in Q3 2023—a remarkable 9 percent year-on-year growth. Despite these market fluctuations, housing demand currently faces challenges due to rising property prices and mortgage rates.
Experts anticipate further potential growth in housing demand if home loan interest rates remain stable or decrease in the coming months. As the festive season approaches, the report predicts that new property launches will reach 1,08,782 units in Q4 2023, ultimately culminating in a total absorption of 5,01,281 units by the end of the year. This projection signifies the resilience and adaptability of India's real estate market amid changing economic dynamics.
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