Despite an increase in home loan interest rates and rising housing prices, the overall sentiment in the domestic residential market remains positive on the back of robust demand with as many as 2.6 lakh housing units expected to be sold by the end of 2023, the highest number since 2008. The growth momentum is likely to continue in 2024 with sales likely to touch around 3 lakh units, JLL’s report titled ‘2023: A Year in Review’ said.
The residential market is experiencing a strong demand and ample supply, indicating its resurgence and continued growth this year. Residential sales in the first nine months of 2023 reached 1.96 lakh housing units, which is 91% of the total sales in 2022.
It should be noted that residential sales broke all records with average quarterly sales of over 65,000 units till the third quarter of 2023. In 2024, it is expected that residential sales may be around 2.9 lakh to 3 lakh units on the back of robust demand and quality launches.
Data includes only apartments and for top seven cities of India that include. Row houses, villas, and plotted developments were excluded from the analysis. Top seven cities include Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Pune.
In the first nine months of 2023, there was a significant increase in launches, reaching a record of 2.23 lakh units, showing a healthy year-on-year growth of 21.5%. It is anticipated that by the end of 2023, around 2.8 lakh units may be launched.
Further, the robust supply pipeline from reputable developers indicates that the launches will continue to be strong in 2024, with an estimated range of 2.8 lakh to 2.9 lakh housing units, the report said.
“Despite the increase in home loan interest rates and rising prices, the overall sentiment in the domestic housing market remains positive, with homebuyers maintaining an upbeat attitude towards purchasing homes. In 2023, residential sales are expected to surpass 2.6 lakh units and launches are likely to be around 2.8 lakh units, a historic high post 2008. There is a possibility of a policy rate cut in 2024 provided the GDP growth and inflation support such a stance of RBI,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
In 2024, residential sales in the primary market are expected to be around 2.9 lakh to 3 lakh units. Also, the sales guidance shared by various established developers reflect robust sales which are expected to get a healthy response from the buyers, he said.
Demand for under construction housing units picking up
During January to September 2023, 71% of the residential sales (around 138,925 units out of total sales of 196,227) were recorded in projects that were launched during Jan 2022 to Sep 2023. Attracted by quality products launched by developers, the risk appetite for consumers is increasing for under-construction projects since these projects are getting executed and delivered within stipulated timelines.
Premium segment records growth in sales in 2023
Mid segment price category ( ₹50 to ₹75 lakh) has dominated in the nine months of 2023 and sales were similar to nine months in 2022. However, share of the premium segment (above ₹1.50 crore) has increased from 18% in the nine months in 2022 to 22% in the nine months in 2023.
Delhi-NCR and Mumbai record highest housing sales in 2023
Delhi NCR and Mumbai have recorded maximum sales in the first nine months of 2023 in the premium segment. Luxury segment (priced above ₹3 crore) sales went up by 83% from 8,013 units in the nine months of 2022 to 14,627 in the first nine months of 2023. With homebuyers upgrading to bigger sized homes, developers are launching such projects taking cognizance of this demand trend.
Outlook for 2024
The residential market is expected to remain buoyant and ride the next wave of growth and expansion with a good response from buyers in the mid and premium segment.
“Demand for residential apartments to be backed by a robust supply pipeline with many branded developers having announced new launches and their entry into newer markets. Launches will continue to be strong in 2024, with an estimated range of 2.8 lakh to 2.9 lakh units,” said Siva Krishnan, senior managing director – Chennai and Coimbatore, Head of Residential, India.
Despite an election year in 2024, demand drivers are likely to pave the way for a strong north-bound growth trajectory, the report said.
Strategic land acquisitions at prime locations and along growth corridors in cities is expected to strengthen the supply inflow across cities.
Launch of diversified products to gain momentum including plotted developments, low rise apartments, row houses and villaments.