Indian Residential Real Estate Sales Rises 26 % YoY

BY Realty Plus

Residential real estate recorded a fresh high in the third quarter of FY24 with pre-sales of 301 million sqft, up 26 per cent YoY and 16 per cent QoQ, crossing the previous peak of 259 million sqft in the second quarter of the financial year. Per the analysis by Kotak Institutional Equities, with multiple launches planned for the Q4FY24/ FY2025E, the sales momentum is expected to sustain, going ahead.

During the third quarter, Kotak Institutional Equities stated, pricing momentum was robust, with average realizations at Rs 7609/ sqft (11per cent YoY, 3 per cent QoQ)–Gurugram and Bengaluru saw larger increases. Hyderabad (53 per cent YoY) and MMR (28 per cent YoY) led the sales growth, followed by Bengaluru (19 per cent YoY) and NCR (12 per cent YoY), it said. DLF, Prestige and Godrej delivered strong pre-sales growth in Q3FY24.

Per the date released by Kotak, all-India residential sales for Q3FY24 stood at 301 million sqft, with 9MFY24 sales at 797 million sqft, and this puts the sector in a good position to cross the 1 billion sqft-mark for full-year FY2024E. With the fourth quarter lined up with multiple planned launches by key players, the report stated that this should support full-year sales.

The demand in Q3FY24 was led by Hyderabad that saw sales of 55.9 million sqft, aided by multiple launches (including Prestige City), followed by MMR at 48.5 million sqft, Bengaluru at 27.5 million sqft and NCR at 22.4 million sqft. Momentum has sustained in January 2024 that saw 97 million sqft of sales, it said. Launch activity was healthy at 253 million sqft, aiding sales. Overall, inventory across the country reduced to 1.37 billion sqft, as of December 2023, equivalent to ~1.4 years of sales (based on trailing 12 months). 

“Our coverage universe witnessed Q3FY24 sales of Rs 295 billion (89 per cent YoY, 27 per cent QoQ), leading to an all-India market share of 12.9 per cent. DLF, Prestige and Godrej saw the highest pre-sales growth, followed by Brigade, Signature, Sobha and Lodha. We highlight that our coverage players have 28 million sqft of planned launches for Q4FY24, compared with 67 million sqft in 9MFY24, which should aid the full-year sales performance,” said Murtuza Arsiwalla, Director at Kotak Institutional Equities. 

National Capital Region (NCR): The NCR region saw a healthy improvement in sales activity during Q3FY24, with 22.4 million sqft (12 per cent YoY) of sales; the improvement was aided by better launches at 17.8 million sqft. The sales mix continued to be dominated by Gurugram (57 per cent), followed by Greater Noida (15 per cent) and Ghaziabad (12 per cent). Net unsold inventory at NCR declined during the quarter to 143 million sqft as of December 2023, and equivalent to ~2.1 years of sales (based on trailing 12 months).

Blended realizations in NCR increased 32 per cent YoY to Rs 13,124 per sqft for Q3FY24, with Gurugram at Rs 14,105/sqft; the improvement was due to the sale of high-priced DLF Privana in the quarter. The prices in Gurugram softened to Rs 13,563/sqft in January 2024. Noida has seen a sharp YoY increase in prices, with average realization for Q3FY24 at Rs 12,658/sqft.

MMR continued to witness momentum in residential sales in Q3FY24, with 48.5 million sqft of residential sales against launches of 37.2 million sqft. Unsold residential inventory in MMR stood at 268 million sqft, as of December 2023. We highlight that Thane continues to house 43 per cent of the unsold inventory in the MMR region. 

Bengaluru continued to see strong sales of 27.5 million sqft due to 25.5 million sqft of new launches in Q3FY24. “We highlight that Bengaluru has seen better sales and pricing performance compared with NCR and MMR in the past few quarters, after having lagged for a few quarters earlier. Average realizations in Bengaluru stood at Rs 7,958/sqft,” it said. 

Hyderabad saw very strong sales of 55.9 million sqft owing to strong launches of 67.6 million sqft in Q3FY24–Prestige’s launch and sales (Prestige City) would have contributed significantly during the quarter. Pricing momentum sustained during the quarter, with average realization at Rs 7,651/sqft. 

Tags : Indian Residential Real Estate Sales National Capital Region Brigade Signature  Sobha Lodha.