December 21st, 2023
The residential sector in India is expected to register sales of around 260,000 units, which will be the highest sales since 2008, according to a recent report by JLL titled ‘2023: A Year in Review’. The report said the growth momentum currently seen is expected to be carried forward in 2024.
According to the report, the residential market is witnessing a strong demand and ample supply, indicating its resurgence and continued growth this year. Residential sales in the first nine months of 2023 reached 196,227 units, which is 91% of the total sales in 2022. The report highlighted that residential sales broke all records with average quarterly sales of over 65,000 units till the third quarter of 2023. In 2024, residential sales is expected to be around 290,000 to 300,000 units on the back of robust demand and quality launches.
In 9M 2023, there was a significant increase in launches, reaching a record of 223,905 units, reflecting a year-on-year (YOY) growth of 21.5%. Around 280,000 launches have been projected by the end of 2023. Furthermore, the robust supply pipeline from reputable developers indicates that the launches will continue to be strong in 2024, with an estimated range of 280,000-290,000 units.
Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, said “Despite the increase in home loan interest rates and rising prices, the overall sentiment in the domestic housing market remains positive, with homebuyers maintaining an upbeat attitude towards purchasing homes. In 2023, residential sales are expected to surpass 260,000 units and launches 280,000 units to reach historic high post 2008. There is a possibility of policy rate cut in 2024, provided the GDP growth and inflation support such a stance of RBI. In that scenario, we would likely see a further growth trajectory in the residential sector. In 2024, we expect the residential sales in the primary market to be around 290,000 to 300,000 units. Also, the sales guidance shared by various established developers reflect robust sales which is expected to get healthy response from the buyers.”
The report also highlighted that during Jan to Sep 2023, 71% of the residential sales, around 138,925 units out of total sales of 196,227, were recorded in projects that were launched during Jan 2022 to Sep 2023. Attracted by quality products launched by developers, the risk appetite for consumers is increasing for under-construction projects since these projects are getting executed and delivered within stipulated timelines.
Premium segment records growth in sales in 2023
According to the JLL report, mid segment price category (Rs 50 – 75 lakh) has dominated 9M 2023 sales like 9M 2022. However, share of premium segment (above Rs 1.50 crore) has increased from 18% in 9M 2022 to 22% in 9M 2023. Delhi NCR and Mumbai recorded maximum sales in first nine months of 2023 in the premium segment. On the other hand, luxury segment (priced above Rs 3 crore) sales rose by 83% from 8,013 units in 9M 2022 to 14,627 in 9M 2023. With homebuyers upgrading to bigger sized homes, developers are launching such projects, taking cognizance of this demand trend.
Trends look forward to in 2024
Siva Krishnan, Sr. MD – Chennai & Coimbatore, Head of Residential, India, said “We expect the residential market to remain buoyant and ride the next wave of growth and expansion with a good response from buyers in mid and premium segment. Demand for residential apartments to be backed by a robust supply pipeline with many branded developers having announced new launches and their entry into newer markets. Launches will continue to be strong in 2024, with an estimated range of 280,000-290,000 units” said.
According to the report, developers have realigned their marketing strategies based on the current market dynamics, and this is clearly getting reflected in increasing number of launches in the higher ticket size projects. Strategic land acquisitions at prime locations and along growth corridors in cities is expected to strengthen the supply inflow across cities. It further stated that launch of diversified products is expected to gain momentum including plotted developments, low rise apartments, row houses and villaments.
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