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The Indian real estate market, though generally positive, is seeing a slowdown in residential property sales in key IT hubs like Pune, Hyderabad, and Bengaluru. PropEquity data shows a significant drop in sales for Hyderabad (20%) and Pune (15%) in Q2 2024, while Bengaluru's sales remain flat. This contrasts with their Q1 growth of 6%, 18%, and 1%, respectively. Factors include sharp property price increases and a slowdown in the IT/ITeS sector. Despite the decline, overall annual sales figures remain strong, with experts suggesting the market is self-correcting after rapid price hikes. Prospective buyers should carefully assess the market before committing.
While the Indian real estate market shows positive growth overall, a recent slowdown in residential property sales in major IT hubs is raising eyebrows. Cities like Pune, Hyderabad, and Bengaluru, which saw moderate growth in Q1 2024, are experiencing a decline or flat sales figures in the current quarter, according to PropEquity data. Advertisement
Hyderabad and Pune have witnessed the steepest drops among major cities, with sales falling 20% and 15% respectively compared to Q1 2024. Bengaluru, a traditionally strong market, has seen flat growth. In Q1 2024, these cities reported growth of 6%, 18%, and 1% respectively. Experts point to a combination of factors for this slowdown.
A significant reason is the sharp rise in property prices, particularly in Hyderabad and Bengaluru. Traditionally, these cities have seen strong demand in the mid-segment (Rs. 40 lakh - Rs. 80 lakh). However, recent price hikes are pushing potential buyers out of the market. Some analysts believe prices in these cities have even doubled in the last four years.
Another factor could be a slowdown in the IT/ITeS sector itself. With job creation slowing down and a decline in startup activity, potential homebuyers, often IT professionals, may be feeling less confident about making large purchases. Data from PropEquity shows enquiries in Hyderabad have dropped by 17-18% and by 15-16% in Bengaluru compared to the previous quarter.
However, not everyone sees this as a cause for alarm. Some experts point out that the slowdown comes from a record-breaking first quarter in 2024, with overall sales figures still remaining healthy on an annual basis. Cities like Bengaluru and Pune have seen a significant increase in their annual sales volume, with markets reaching 60,000-90,000 units a year. While the growth rate may slow, the high sales numbers are likely to be sustained, argues Sunil Pareek, Executive Director at Assetz Property Group.
Analysts predict a moderate decline of 5-8% in quarterly sales across the top 7 cities in Q2 2024, with yearly figures remaining relatively stable. This slowdown might be a sign that the market is correcting itself after a period of rapid price increases.
Potential homebuyers in these cities should carefully consider their options and ensure they are comfortable with the long-term financial commitment before making a purchase. It's crucial to do thorough research and understand the current market trends.
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