Housing sales in India’s top six cities – Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, and Pune — have surged by 20% during the January-March period. The number of housing units sold has reached around 1,47,000 units, according to NoBroker.
This anticipated growth reflects the resilience and potential of the market, fuelled by ongoing developments and investments in the property market.
The Indian real estate sector, in fact, has witnessed a promising start in 2024, marked by a surge in demand for residential properties despite challenges posed by escalating prices. This momentum is anticipated to persist in the coming months, with numerous new project launches underway and many more in the pipeline.
Furthermore, the recent decision by the RBI to maintain the repo rate unchanged is set to present a favourable environment for homebuyers.
Commenting on the same, Amit Agarwal, CEO & Co-founder, NoBroker.com, said, “The average rent increase has been higher than average salary increments across cities which has prompted potential home buyers to take the plunge. While rents may stabilize with more supply coming in gradually, they will not come down.”
The current year has begun with an outstanding start, observing heightened demand and exponential surge in property transactions. The growth trajectory of the country’s economy, coupled with controlled economic policy environment, has boosted the confidence of buyers to make the plunge. “Although the property price escalations persist, we are anticipating robust sales, which is indicative of buoyant homebuying sentiment and buyers’ persistence to owning a physical asset. This outlook is further steered by relatively cheaper home loan interest rates, which currently varies between 8.30% and 11.15% per annum,” he added.
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It is interesting to note a new trend emerging among homebuyers, indicative of a “K-type” growth trajectory. Individuals previously eyeing properties within the price range of Rs 80 lakh to Rs 1 crore are now upgrading their preferences above the Rs 1-crore mark. They are choosing bigger unit size and properties within gated societies. However, those initially considering homes between Rs 60 lakh and Rs 80 lakh are opting for more affordable options, marking a downward shift in their housing choices. This divergence in purchasing behaviour underscores the diverse impacts of market dynamics on different segments of the population, contributing to the bifurcation of growth patterns.
Against a backdrop of surging demand, we have even observed that certain projects have been absorbed within a day of their launch, underscoring the rapid pace of transactions in the market. Furthermore, properties nearing completion are witnessing a notable uptick in prices, intensifying the frenzy among buyers to secure their purchases before further escalations. Adding to this dynamic landscape, there’s a discernible trend emerging where Grade B builders command prices on par with their Grade A counterparts, signalling a levelling of the playing field in terms of pricing dynamics,” Agarwal said.
Given the strong residential demand and the surge in input costs, there will likely be sustained pressure on property prices, resulting in further upward revisions. Also, the easing of retail inflation in India has the potential to positively impact real estate buyers by enhancing affordability, improving borrowing conditions, and fostering a more conducive market environment for property transactions.
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NoBroker’s annual real estate report 2023 highlighted the enduring confidence of investors in real estate as a prime investment avenue. This is evident from 74% of the surveyed participants expressing a preference for it over other more volatile options such as SIPs, stocks, gold, and bitcoin. Among the major cities, Delhi-NCR and Bengaluru account for 45% of total sales. In fact, Bengaluru is set to witness over 25% jump annually vis-à-vis 2023.
