The housing sector saw record-breaking sales in 2023 with 2,71,800 units across the top-7 cities of India, recording a 26 per cent jump year-on-year, according to a report by real estate consultant JLL. It said the 26 per cent growth in 2023 has made it the best year for the residential market and has surpassed the previous peak of 2010 by 25 per cent.
The top-7 cities in India are Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Kolkata, and Pune.
“2023 has become the best year for the residential market as it surpassed the previous peak of 2010 by 25 per cent. On a y-o-y basis as well, 2023 sales were up by 26 per cent, with every quarter performing better than the previous one. The fourth quarter of the year saw stupendous sales with 75,500 units sold during the quarter, making it also the best performing quarter ever,” JLL said in a statement.
The tech-driven cities have seen impressive annual growth led by heightened sales activity.
The fourth quarter of the year saw stupendous sales with 75,500 units sold during the quarter, making it also the best-performing quarter ever.
Samantak Das, chief economist and and head (research & REIS) at India, JLL, said, “The tech cities of Pune, Chennai, Bengaluru, and Hyderabad witnessed a remarkable growth in sales as compared to the previous year. The significant upside in the sales in 2023 reflects the innate potential of these markets. The demand is primarily driven by an increasing return to office in the IT/ITeS sector and expansion of global firms and global capability centres (GCCs) along with setting up of new ones.”
He added that in addition, the quality supply brought in by prominent developers has pushed up the sales in these cities to a large extent.
Siva Krishnan, managing director and head (residential services)-India, JLL, said, “The overall sales across the top seven cities picked up significant momentum in the second half of the year. It is pertinent to note that both mid-market and premium segments have contributed jointly 23 per cent each to drive the sales in 2023. Delhi-NCR and Mumbai have seen the maximum sales in the premium segment (apartments priced above Rs 1.5 crore).”
Krishnan added that there is a rising demand for bigger homes with premium amenities and support infrastructure. Delhi NCR saw some prominent launches in the premium segment that were sold out completely within a few days. Around 45 per cent of the annual sales in Delhi NCR during the year was contributed by the premium segment.
“With the unchanged repo rate, robust supply pipeline announced by established developers and steady land acquisitions taking place in the last one year, the market reflects a positive outlook for 2024,” Krishnan said.
Premium Segment
According to the report, the premium segment (apartments priced above Rs 1.5 crore) share in annual sales has increased from 19 per cent in 2022 to 23 per cent in 2023. The premium segment has also emerged as a leader in terms of absolute apartment units sold during the year surpassing every other price segment.
Also, apartments priced less than Rs 75 Lakh, have seen a perceptible decline in share.
What Analysts Say
Prashant Rao, managing director of Hyderabad-based realty Poulomi Estates, said, “Several factors are fueling the demand for housing, encompassing a strong desire for homeownership, aspirations to upgrade to more spacious and luxurious residences, and investments in vacation homes for leisure or potential returns in the real estate market.”
He added that a robust equity market and a thriving economy further amplify the housing demand across various segments. Importantly, this demand isn’t confined to specific cities or regions; it is widespread across the nation.
“This upward trajectory in housing demand is projected to persist, bolstered by significant infrastructure projects and industrial developments in numerous cities. Cities like Hyderabad are emerging as focal points for IT and BFSI sectors, attracting a burgeoning influx of young talent. Consequently, Hyderabad is experiencing remarkable growth, outpacing many other urban centers in the country,” Rao said.
Mohit Jain, managing director of Krisumi Corporation, said that after regaining its shine as an asset class, real estate has witnessed remarkable momentum in the past couple of years.
“Buoyed by economic growth, rising incomes, and a renewed emphasis on homeownership, we expect housing demand to stay robust for the next few years, with luxury properties paving the way due to homebuyers increasing preference for spacious and comfortable living in both metros as well as in other cities,” Jain added.
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