Mumbai, 19th November 2024: The Indian residential real estate market showed positive momentum in the third quarter of 2024, with a 2% quarter-on-quarter (QoQ) increase in units sold and a 7% rise in value. The growth was particularly notable in the luxury segment, which saw both significant increases in sales volume and overall sales value. This upward trend was complemented by a moderate rise in prices across key regions, with certain cities registering strong year-on-year (YoY) price appreciation.
The luxury and ultra-luxury segments continued to outshine other market categories, with properties priced above ₹1 crore experiencing notable growth. Units in the ₹1-2 crore price range saw a 5% increase in sales, while properties priced above ₹2 crore recorded a robust 13% rise. The luxury segment accounted for 73% of the total sales value in Q3 2024, highlighting the growing demand for high-end residential properties in the country.
Growth Across Markets
The top eight metro regions—Mumbai Metropolitan Region (MMR), NCR, Bengaluru, Pune, Hyderabad, Chennai, Ahmedabad, and Kolkata—continue to dominate the market, accounting for 76% of total sales across India. However, despite a 1% increase in sales in these regions, it was the Tier 2 cities that saw the highest growth, with a 5% rise in sales compared to the previous quarter.
The MMR region recorded the highest sales in terms of both units and value, with a 4% quarter-on-quarter growth. In contrast, Pune saw a 6% decline in sales, primarily due to a dip in the mid-range segment. Notably, Hyderabad and NCR continued to show strong growth, with Hyderabad maintaining consistent sales, driven by its growing popularity as a key business hub.
In terms of price appreciation, the northern regions, including Noida, Greater Noida, Ghaziabad, Faridabad, and Gurgaon, saw the highest year-on-year price growth. While the MMR experienced a more modest 5-7% price increase, areas in the NCR region, especially Noida and Gurgaon, saw higher appreciation, with some locations posting increases as high as 20-30% over the past year.
Decline in New Supply
While sales grew, the market also saw a 7% decline in new supply across the 60 major cities compared to the previous quarter. This drop was particularly evident in the affordable and mid-price segments, which saw a 30% fall in new launches below ₹30 lakh. However, the luxury segment continued to show resilience, with a 16% increase in new luxury supply, particularly in the ₹1-2 crore and ₹2 crore-plus price categories. The ultra-luxury segment (properties above ₹2 crore) made up 53% of the new supply value in Q3 2024.
Despite the overall drop in new launches, Tier 2 cities experienced a significant decline of 13% in new launches, indicating some pressure on the supply side, particularly in smaller cities. Notably, Hyderabad and NCR were exceptions, managing to maintain launch numbers consistent with previous quarters. NCR, in particular, showed strong 57% YoY growth in new supply, driven by the demand for larger, premium properties.
Unsold Inventory and Market Dynamics
While unsold inventory remained largely stable across the country, there was a slight decline of 5% in Tier 2 cities in the past quarter. On average, the months of inventory (the time it would take to sell all the unsold units at the current sales pace) stood at 14-15 months in markets like Bengaluru and Pune, and 15 months in Tier 2 cities, indicating a relatively balanced market in these regions.
The apartment segment remained dominant, accounting for 81% of total sales in Q3 2024, while plots and villas contributed to 19% of the market. Interestingly, the plots/villa segment showed a marked improvement in sales, with a 16% increase QoQ, signaling growing demand for independent homes in suburban areas and smaller cities.
Outlook for the Future
The Indian residential real estate market is expected to continue its upward trajectory as demand remains strong, particularly in the luxury and ultra-luxury segments. The ongoing growth in Tier 2 cities coupled with strong demand in metros like MMR, Bengaluru, and Hyderabad will likely support continued sales growth in the upcoming quarters. However, the decline in new supply in the affordable and mid-price segments could potentially limit options for first-time buyers and impact overall market liquidity.
With rising prices, limited supply, and growing demand for high-end properties, the luxury real estate sector looks poised for sustained growth, particularly in markets like NCR, MMR, and Hyderabad, where both sales and price growth are expected to continue.
The data is from a report released by Liases Foras a real estate research firm.
