The Indian real estate market has witnessed a remarkable resurgence in 2023, with housing sales experiencing a substantial increase of 26% on a year-on-year basis, totalling a commendable 2.71 lakh units across the top seven cities. This robust growth, as reported by JLL, signifies the continued buoyancy of the residential real estate sector, driven by a variety of factors including tech-driven cities, strategic land acquisitions, and a favourable economic outlook.
Price Dynamics: Upward Trajectory Across Cities
In 2023, residential prices in the top seven cities of India exhibited a notable increase, ranging between 4% and 16% year-on-year. Bengaluru emerged as the front-runner in this price surge, experiencing the highest increase of 16%, indicative of the city’s resilience and attractiveness in the real estate landscape.
City-wise Sales Breakdown: Tech-Driven Cities Lead the Way
Tech-driven cities, notably Pune, Chennai, Bengaluru, and Hyderabad, played a pivotal role in propelling the surge in housing sales, outpacing the previous year’s performance. The report from JLL underlines that these cities witnessed heightened sales activity, fuelled by factors such as the return to office in the IT/ITeS sector, expansion of global firms and Global Capability Centres (GCCs), and the establishment of new enterprises.
Samantak Das, Chief Economist, and Head of Research & REIS, India, JLL, noted, “The significant upside in 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.”
Mid and Premium Segments: Joint Contributors to Sales Surge
In a notable trend, both the premium segment (apartments priced above ₹1.5 crores) and the mid-segment (apartments priced between ₹50 lakhs to ₹75 lakhs) jointly led the annual sales in 2023, each contributing 23% to the total. This indicates a diverse range of demand from homebuyers, with varying preferences and budget considerations.
Sales Momentum: The Fourth Quarter Triumph
The sales momentum gained remarkable acceleration in the second half of the year, culminating in a stellar fourth quarter. Notably, the sales in the fourth quarter of 2023 reached a zenith, with a staggering 75,500 units sold during the quarter. This not only marked a peak in quarterly performance but also contributed to the year’s remarkable feat of surpassing the previous peak recorded in 2010 by 25%.
2024 Projections: Sustained Growth on the Horizon
As the real estate market looks ahead, JLL’s report projects a continued growth trajectory in 2024, with residential sales expected to reach around 3 lakh to 3.15 lakh units, reflecting a 10-15% year-on-year growth. The optimistic outlook is anchored in the assumption that India’s current GDP growth will sustain, coupled with a range-bound inflation in the economy and a potential decrease in home loan interest rates by 40-50 basis points during the year.
City-wise Sales Highlights: Delhi NCR and Mumbai Lead in Premium Segment
Delhi NCR and Mumbai emerged as frontrunners in the premium segment, witnessing the maximum sales of apartments priced above ₹1.5 crores. The demand for larger homes with premium amenities and robust support infrastructure has been a driving force in these cities. Delhi NCR, in particular, experienced notable launches in the premium segment, with around 45% of the annual sales in the region contributed by this segment.
Strategic Land Acquisitions and Future Supply Inflow
The report highlights the anticipation of strategic land acquisitions at prime locations and along growth corridors in cities, which is expected to strengthen the supply inflow across various cities. This strategic move by developers is poised to meet the growing demand for housing and contribute to the overall vibrancy of the real estate sector.
In conclusion, the surge in housing sales in 2023 paints a picture of resilience, adaptability, and sustained demand in the Indian real estate market. The multifaceted dynamics, from tech-driven city influences to diverse demand across segments, underline the industry’s ability to navigate challenges and capitalize on opportunities. As the sector continues to evolve, guided by positive economic indicators and strategic initiatives, the real estate landscape in India remains an exciting arena for both developers and homebuyers alike.
