Surge in demand in premium residential realty in H1 2023 | Sunny Developers

Surge in demand in premium residential realty in H1 2023. - The report points that Hyderabad, NCR, Kolkata and Chennai saw positive growth. Bengaluru and Mumbai witnessed sales that are near decade high. - Get in touch with - An Realestate New Construction Project in Mulund west


Surge in demand in premium residential realty in H1 2023

July 10th, 2023

Listen to this News

The all India residential sector has recorded a sale of 1,56,640 units in H1 2023, as per the Knight Frank report titled India Real Estate H1 2023. This is marginally lower by 1% YoY (January – June 2023) but 1.7% higher compared to H2 2022.

According to the report, while low-interest rates and comparatively low residential prices sparked the revival in demand, the residential sales level sustained even as interest rates rose.

The report mentioned that the all India new launches stood at 1,73,364 units, up 8% YoY. H1 saw a growth for the premium residential segment, as it witnessed a rise across cities in H1 2023. The demand for mid-segment homes eclipsed the affordable segment in H1.

While Hyderabad, NCR, Kolkata and Chennai saw positive growth, Bengaluru and Mumbai witnessed sales that are near decade high. New launches were steady across key markets. Pune and Bengaluru saw double-digit growth in terms of the number of new launches.

Mumbai’s sales volume of 40,798 home units accounted for 26% of the total sales among the top eight markets, the highest among all markets. NCR, Bengaluru, and Pune stood second, third and fourth respectively in terms of sales witnessed in H1. In terms of annual percentage increment, Hyderabad witnessed an increase of 5% YoY with a sales volume of 15,355 units.

While the market is carrying more inventory, the consistently high sales volumes in H1 2023 have pushed down the Quarters to Sell (QTS) level from 7.8 to 6.7 quarters during this period.

QTS measures the number of quarters required to exhaust the unsold inventory, which has reduced for most markets. It is the lowest for Pune city, followed by Bengaluru and Chennai. Generally, a lower QTS level denotes greater sales traction and better market health.

India residential market: Ticket size split comparison of sales in H1 2022 & H1 2023

The share of sales of homes costing Rs 1 crore and above grew from 25% of sales in H1 2022 to 30% in H1 2023. This can be attributed to the rising prices and the homebuyers’ need to upgrade to larger living spaces with better amenities. The biggest development was the share of homes in the Rs 50 lakh – Rs 1 crore eclipsing that of the affordable home segment costing below Rs 50 lakh. The percentage of sales in the mid-segment category grew from 35% in H1 2022 to 38% in H1 2023. And the affordable segment – homes of value below Rs 50 lakh saw a dip from 40% in H1 2022 to 32% in H1 2023. The market is evenly balanced between the three segments with the share of sales now ranging between 30-38%.

Prices increased across all markets in the range of 2% – 10% YoY with some of the larger volume markets of Mumbai (6%), Bengaluru (5%), and NCR (5%) registering notable growths. This also marks H1 2023 as a period in which prices have grown in YoY terms across all markets for the second time since H2 2015.

Shishir Baijal, chairman and managing director, Knight Frank India, said, “Residential sales have been strong in most markets during the first half of 2023. The main drivers of market momentum are mid and premium segment homebuyers, who possess both the desire and financial capability to purchase a home. On the other hand, the fallout of headwinds has been the affordable housing segment which has seen deceleration in its volume as well as market share decline significantly. For the mid and premium segment, it is interesting to note that demand remained robust despite the increase in home loan rates during the first few months of the year, which highlights the enduring strength of the market. With a promising pipeline of new project launches and high consumer enthusiasm, we anticipate that market traction will continue throughout the remainder of the year.”


Do You Have Any Questions ?

We deliver a high level of craftsmanship with a stress-free approach.