According to JLL India, Mumbai, Delhi-NCR, Ben- galuru, Pune, Hyderabad, Chennai, and Kolkata are expected to see record-breaking sales activity, with over 300,000 homes sold by the end of 2024. The total value of these sales is estimated to be around 5.10 lakh crore.
The first three quarters of 2024 saw sales of over Rs 110,000 crore each with over 115 million sq ft sold in every quarter. This growth is further driven by increased consumer confidence, and growing invest- ments from institutional and foreign investors.
Delhi NCR witnessed highest annual price rise across the major cities at 32% YoY, led by launches of select marquee projects within the luxury & ultra-luxury segment. Within Delhi NCR, Dwarka Expressway and Golf Course Extension/Sohna Road witnessed a significant price appreciation of over 50% YoY, leading to a sharp rise in average housing prices at an overall level.
Housing Price Rise
Housing prices in India’s top 8 markets rose by 11% in Q3 2024, continuing a 15-quarter growth streak. Unsold inventory dropped for the third consecutive quarter, with developers focusing more on luxury and larger homes.
All major housing markets across India experienced an annual rise in housing prices led by Delhi NCR and followed closely by Bengaluru. After two years of record-high sales, demand across the top Indian cities is stabilizing, with expectations of robust residential activity in the final quarter, 2024 is likely to conclude on a strong note
“Sales and prices continue to grow, suggesting affordability and demand are intact. The luxury segment is still dominant, although we have been seeing a gradual reduction in new launches. While MMR, Pune, and Hyderabad are reaching a plateau in sales and supply, NCR, Chennai, and Tier 2 cities have a deficient supply level; they may see a surge in new launches”, said Pankaj Kapoor, Managing Director, Liases Foras.
Unsold Inventory Decline
The overall unsold inventory continued to witness a quarterly drop for the third consecutive quarter, led by healthy uptake in housing units. Interestingly, 7 out of 8 cities saw a dip in unsold inventory levels, on a quarterly basis.
At the end of September 2024, unsold inventorystood at over 10 lakh housing units across the eightmajor cities, with MMR accounting for a majorityat about 40% share. At 13%, Pune saw the highestdecline in unsold inventory levels annually. Interestingly, it was the fifth consecutive of drop in inventory levels for the city. Annual decline in unsoldinventory levels have been significant in Chennaiand Kolkata with 7-9% drop.
“With existing high unsold inventory levels to the tune of 10 lakh units across the eight major cities, developers are being cautious with new launches. They are realigning their strategies by assessing and identifying the appropriate target audience in high demand pockets. Although new launches have moderated in the affordable housing segment, developers have stepped up their offerings in luxury and ultra-luxury segments. Average housing prices for spacious dwelling units, particularly 3-4BHK configurations in cities like Bengaluru and Delhi NCR increased by up-to 26% YoY during Q3 2024,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
The Growth Outlook
Some factors that are driving the growth of the real estate market include: Growing urbanization, Steady job creation, and Increasing need for modern housing solutions. Despite challenges like inflationary pressures,rising interest rates, and potential geopolitical instability, the real estate market has shown resilience.
“During 2024, real estate developers continued to acquire strategic land parcels across the metro cities for proposed residential development, thus the housing supply for 2025 across the top seven cities is expected to remain robust. Demand is expected to remain strong too. With sales anticipated to go up, capital values too will rise, eventually pulling up the area and overall value of homes to be sold” said Siva Krishnan, Senior MD (Chennai & Coimbatore), Head - Residential Services, JLL India.
developers are being cautious with new launches.They are realigning their strategies by assessingand identifying the appropriate target audiencein high demand pockets. Although new launcheshave moderated in the affordable housing segment, developers have stepped up their offeringsin luxury and ultra-luxury segments. Average hous-ing prices for spacious dwelling units, particularly3-4BHK configurations in cities like Bengaluru andDelhi NCR increased by up-to 26% YoY during Q32024,” said Vimal Nadar, Senior Director and Headof Research, Colliers India.
As per Colliers, steady rise in average housing prices can have a stabilizing effect on the residential market in 2025, especially in the affordable housing seg-ment. If enabling conditions prevail, a reduction in benchmark lending rates can add buoyancy to the housing market in 2025. Within residential real estate, demand for luxury and ultra-luxury segments will witness higher growth as compared to affordable and middle-income segmernts.
Developers will continue to recalibrate their strategies and be selective in launching new projects. Amidst sustained housing demand, inventory levels, thus can drop further over the next few quarters. Ready-to-move-in properties and reputed developers with established project execution capabilities will continue to be preferred by homebuyers in 2025.
Housing sales have remained healthy and hit a new peak during January-September in 2024 with close to 230,000 homes across the top seven cities worth Rs 380,000 crore solda till now that translates into 363.2 million sq ft of space sold in the first nine months of the year.
As per the CREDAI – Colliers - Liases Foras, housing price-tracker report, housing prices in the top eight markets in India increased to Rs 11,000 per square foot on an average during the third quarter of 2024. This marks the 15th consecutive quarter of growth since 2021, driven by strong demand and positive market sentiment., Chennai, and Kolkata are expected to see record-breaking sales activity by the end of 2024.
