In the first nine months of 2023, residential sales have reached nearly 91 percent of the total sales recorded in 2022, according to JLL India’s Residential Market Update for Q3 2023. With the onset of the festive season, it is anticipated that robust sales will continue into the upcoming quarter, and sales are expected to surpass the 215,000 unit mark from the previous year.
Steady interest rates, coupled with the festive season sentiment, are expected to lead to sales in 2023 exceeding the numbers from the previous year. Demand for residential apartments will be further boosted by a robust supply pipeline as developers announce new projects and explore emerging markets, particularly in peripheral micro-markets where infrastructure enhancements are either in progress or planned.
The strategic acquisition of land in prime locations and growth corridors is set to strengthen the supply. The residential market is projected to maintain its momentum and achieve significant growth and expansion, with a positive response from buyers in both the mid and premium segments.
The top seven cities where these developments are occurring include Bengaluru, Chennai, the National Capital Region, Hyderabad, Kolkata, Mumbai, and Pune.
Notably, the residential market recorded its highest quarterly sales since 2008 in Q3, with the high-end segment contributing significantly to the demand. Quarterly sales reached 69,600 units, driven by high-quality project launches by developers. On a sequential basis, sales experienced a 7.9 percent increase in Q3. Siva Krishnan, Head of Residential at JLL India, noted, “Residential sales broke all records with average quarterly sales of over 65,000 units till the third quarter of 2023. The prominent launches by branded developers saw good sales traction across all the seven cities.”
Mumbai and Bengaluru led the Q3 sales, accounting for 46.6 percent of the total share. Mumbai secured a 23.7 percent share with sales exceeding 16,500 units, while Bengaluru boasted a 22.9 percent share with 15,960 units sold. Pune (13,440 units) and the National Capital Region (10,046 units) also recorded healthy sales. All cities, except Chennai and Hyderabad, saw an increase in sales from the previous quarter.
One notable trend in Q3 was the growing popularity of the premium segment, with properties priced above Rs 1.5 crore accounting for 24.3 percent of quarterly sales. This highlights the increasing preference of buyers for larger homes with exceptional amenities and specifications.
As developers respond to this demand trend, homeowners are upgrading to bigger homes, and the share of all other segments, except the premium segment, declined sequentially in Q3.
Residential prices in major markets experienced an increase due to robust demand. Bengaluru saw the most significant price appreciation, at 14.8 percent annually, followed by Mumbai with a 10.3 percent increase and the National Capital Region with an average rise of 8.5 percent. New launches and new phases of existing projects entered the market at higher prices in some cities.
Samantak Das, Chief Economist and Head of Research & REIS, India at JLL, pointed out that “the robust sales in Q3 as well as the first nine months of 2023 indicate unrelenting buyer activity in the Indian residential market on the back of steady growth in employment and income and, in turn, sustained affordability.“
For new launches, despite a marginal decline in pace during Q3, the first nine months showed robust year-on-year growth of 21.5 percent, totaling 223,905 units. More than half of these launches (54.1 percent) occurred in Mumbai and Pune. A significant share of new launches was in the premium segment, with apartments priced above Rs 1.5 crore accounting for 43.2 percent of these launches.
As of Q3, unsold inventory across the top seven cities increased by 0.6 percent on a quarter-on-quarter basis, with new launches outpacing sales. The cities of Mumbai, Hyderabad, and Bengaluru accounted for 64 percent of the unsold stock. However, the expected time to liquidate unsold stock decreased to 2.3 years in Q3 from 2.5 years in Q2, indicating robust sales growth.
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