In the first three quarters of 2023, India's top seven cities experienced a residential sales surge, reaching 196,220 units, the highest level since 2008. These sales already achieved 91% of 2022 figures and are on track to exceed 215,000 units by year-end. The upscale housing segment, homes priced over INR 1.5 crore, played a substantial role, accounting for 24.3% of Q3 sales. Mumbai and Bengaluru led the charge with a combined 46.6% of total sales. Premium real estate witnessed impressive growth, with property prices appreciating notably. Unsold inventory increased modestly but with a reduced timeline for liquidation, signalling strong sales. A robust supply pipeline and expansion into emerging markets are expected to maintain residential market buoyancy.
During the first nine months of 2023, residential sales of 196,220 units were recorded in the top 7 cities. This has been the highest since 2008. Residential sales have already touched 91% of 2022 sales and are likely to surpass 215,000 units by the end of 2023, according to JLL India’s Residential Market Update – Q3 2023. The high-end segment (priced above INR 1.5 crore) contributed to most of the demand, a substantial 24.3% of the sales ledger in Q3.
On a sequential basis, sales saw an uptick of 7.9% in Q3 2023. The robust quarterly sales at 69,600 units were backed by commensurate quality launches by the developers across all the 7 cities.
Mumbai and Bengaluru have led the Q3 charge, jointly commanding a 46.6% share of the sales landscape. Mumbai, the frontrunner, boasts a formidable 23.7% share, with sales surpassing 16,500 units. Bengaluru comes close with a 22.9% share. Pune and the Delhi National Capital Region have also etched notable sales figures, aided by the arrival of high-quality developments from reputed builders. An analysis of the quarterly sales growth data shows that, except Chennai and Hyderabad all the cities have seen an increase in sales as compared to the previous quarter.
One standout facet of this resurgence is the ascendancy of the premium real estate segment, which has recorded an impressive 36.4% growth quarter-on-quarter. It shows the growing demand among buyers for more expansive abodes adorned with premium amenities and specifications. Also, it is seen that homeowners are upgrading to bigger homes as developers are launching such projects taking cognizance of this demand trend. Except for the premium segment, the share of all other segments declined sequentially in Q3 2023.
Significant property price appreciation is evident in major Indian markets, with Bengaluru leading at an impressive 14.8%, followed by Mumbai at 10.3%, and Delhi National Capital Region at 8.5%. The market has observed the introduction of new launches and project phases at elevated price points in select cities. While the tempo of new launches slowed down slightly in Q3 2023, the initial nine months sustained robust year-on-year growth of 21.5%, culminating in a total of 223,905 units. Notably, more than half of these launches were concentrated in Mumbai and Pune, with an imposing 54.1% originating from these two cities. In line with the sales trend, majority of the new launches in Q3 2023, were in the premium segment with a share of 43.2%.
An examination of unsold inventory in India's top seven cities reveals a modest 0.6 percent increment in Q3. Mumbai, Hyderabad, and Bengaluru together accounted for 64% of the unsold stock. What's striking, though, is the dwindling timeline for liquidating unsold inventory, contracting from 2.5 years in Q2 2023 to 2.3 years in Q3 of the same year. This reflects robust sales growth.
Looking ahead, a robust supply pipeline, expansion into emerging markets, and strategic land acquisitions are expected to support sustained growth. Branded developers have announced new launches and entry into newer markets including peripheral micro markets where infrastructure augmentation is in process or planned. The orchestration of this revival, especially within the mid- and premium segments, is expected to maintain the buoyancy of the residential market.
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