A surge in homebuying activities among Indians is fueling a substantial uptick in residential real estate prices, as indicated by a report from Incred Equities focusing on data from the July-September quarter.
The report reveals a remarkable 36% surge in housing sales across India’s top eight cities during the quarter, reaching an impressive 1.2 lakh units. Notably, this marks the first time quarterly housing sales have surpassed the 1 lakh mark, compared to the previous April-June quarter where sales were around 80,000 units.
Since the onset of the COVID-19 pandemic, quarterly housing sales had not exceeded the 90,000 mark, with the Oct-Dec 2019 period showing the highest sales at around 93,000 units.
Metropolitan cities like Mumbai and Bangalore are driving this increased demand, even with the higher property prices, the report highlights.
Continuing the trend from the pandemic era, growth is notably concentrated in the higher price brackets. Incred points out that sales in the premium segment surged by over 30% quarter on quarter in the September 2023 quarter, contrasting with a relatively stagnant trend in the most affordable housing segment.
Analysts suggest that the sharp rise in the premium segment may be attributed to higher prices pushing properties formerly categorized as affordable housing into the premium segment.
Despite the surge in demand, there has not been a proportional increase in supply, resulting in elevated prices. Incred notes a significant drop in new project announcements during the quarter. While sales increased by 36%, the supply only saw a 24% year-on-year increase.
Due to robust demand, residential prices are on the rise across major residential markets, with Bengaluru experiencing the highest appreciation at around 10%, followed by Mumbai, according to the report.
The analysts anticipate that the decline in new project announcements is temporary and expect a recovery in the second half of the financial year.
