Housing sales rise 7% in top cities in Q1CY23, new launches take a hit

PropEquity has reported that the Indian real estate market is experiencing a surge in housing sales. According to a report from the real estate data and analytics firm, the top 14 cities of the country witnessed an average increase of 7 per cent on year-on-year basis (YoY) in housing sales during the first quarter of the ongoing calendar year.

This growth in the Indian residential market during January-March 2023 period was driven by several factors, including infrastructure growth, government policies and robust launches, said the PropEquity report.

In terms of quarterly sales, Pune, Thane and Hyderabad led the tables with Pune selling 25,536 units in Q1 2023, a market share of around 21 per cent in the entire sales. Thane saw a sale of 24,481 units, while 17,236 units were sold in Hyderabad. These three cities accounted for more than 54 per cent of units sold across all 14 cities.

According to the report, there has been a decline in the number of new residential units launched in India. This trend has been observed since the outbreak of the Covid-19 pandemic in 2020. It is believed to be due to the clearance of earlier stock.

In the first quarter of 2023, new launches saw a decline of 18 per cent YoY at 93,600 residential units compared to 113,491 units launched in the first quarter of 2022. In the December 2022 quarter, 99,019 units were launched, signaling a fall of 5 per cent on sequential basis (QoQ).

On an individual basis, Faridabad was the worst hit in terms of new launches, reporting a decline of 100 per cent on YoY Basis, followed by Ghaziabad, which saw a fall of 61 per cent. However, Gurugram reported a stellar rise of 560 per cent in the new launches at 9,610 units, followed by Chennai at 6,276 units, a growth of 135 per cent annually.

The decrease in new launches may have been influenced by various factors, such as the current market conditions, supply chain disruptions and delays in construction activities.

Market experts believe that the housing market's growth trajectory is likely to continue in the near term but the growth has moderated in the last two quarters by persistent inflation worries and a potential RBI rate hike in the near future.

"The residential market in India saw significant growth Q1 2023, and it started to play a big role in the economy of the nation. Market resurrection has been brought about by the recovery trend since last year, with quarterly sales surpassing the new launches in this quarter by 32 per cent, said Samir Jasuja, Founder & Managing Director at PropEquity

"All parties worked together to fuel this growth and quickly adjusted to shifting customer demands. Residential sales and launches reached record highs as branded developers upped their game and provided supplies. With 1,23,938 units sold in the first quarter of this year, the residential market has entered a new stage of development and new standards have been set," he said.
With spiraling new launches and housing sales in this and the previous quarter, the available inventory in the top 14 cities is at about 5,17,879 units by March 2023 end, improving 14 per cent in the last one year.

In absolute terms, Delhi has the least number of residential inventories at 793 units, followed by Faridabad at 920 units. Unsold units in Chennai and Gurugram have increased 32 per cent and 15 per cent, respectively due to the launch of more new projects.

Delhi tops the table of 14 cities in terms of the weighted average price of sales at Rs 22,675 per square feet (/sq ft), rising 13 per cent YoY. It is followed by Mumbai at Rs 21,356/sq ft. In terms of growth, Gurugram has topped the charts with average prices rising 42 per cent to Rs 14,000/sq ft. Faridabad is the only city that witnessed a drop in prices.

Despite the ongoing geopolitical tensions in the global arena, the Indian real estate sector has remained relatively unaffected during the first quarter of 2023. India has managed to weather the storm better than most other countries due to its stable economic policies, sound governance, and investor-friendly reforms.

The real estate market has shown resilience and continued growth, especially in the affordable housing segment, driven by increased demand from middle-class and first-time homebuyers. This positive trend is expected to continue, buoyed by the government's initiatives to boost infrastructure development and ease of doing business.

"The first quarter of 2023 definitely brings cheer to the residential real estate market; home sales across all the top cities of India have registered double-digit growth. We see sales reaching an all-time high with a whopping 170 per cent YoY growth in Gurugram," said Ankush Kaul, chief business officer- Ambience Group.

PropEquity, which is owned and operated by PE Analytics, is among India’s largest online real estate data and analytics platform covering over 1.5 lakh projects of more than 45,000 developers across over 44 cities in India with more than 16 years of cataloged data.

 

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