The increase in demand is remarkable given that average housing prices in the top seven Indian cities increased by 11% year on year in the third quarter.
According to real estate consultant Anarock, home sales in India’s top seven cities reached an all-time high of 120,280 units between July and September. This is amazing given that the monsoon season typically sees reduced market movement. Sales this year were 36% more than the 88,230 units sold during the same months in 2022.
Demand was roughly 5% higher than the previous quarter’s (April-June) 115,100 unit sales. Until this quarter, it was an all-time high.
The increase in demand is especially significant given that average property prices in the top seven cities increased by 11% over the same quarter last year.
The Mumbai Metropolitan Region (MMR) had the largest demand, with 38,500 units sold. This is 46% more than the 26,400 units planned for 2022. Following MMR were 22,885 units in Pune and 16,395 in Bengaluru. Sales in Pune increased by 63% year on year (YoY), while demand increased by 29% in Bengaluru.
“Overall, the two western cities accounted for 51% of total sales in the top seven cities in the quarter.” In terms of growth, MMR experienced a 46% annual increase in house sales, while Pune saw a whopping 63% annual increase,” stated Anuj Puri, chairman of Anarock Group.
According to the consultant, the ongoing good sales momentum may be ascribed in part to the Reserve Bank of India’s (RBI) repo rate halt. “This has kept home loan interest rates stable, maintaining high housing purchase sentiment,” stated the report.
The RBI paused repo rate rises in April this year, after hiking them by a total of 250 basis points since May 2022.
Hyderabad had the largest average housing price increase, at 18%.
Along with rising demand, supply was also plentiful during the quarter. The top seven cities had 116,220 new units introduced in the quarter, up from 93,490 in the same quarter previous year—a 24 percent rise. There was a 13% increase from 102,610 units released between April and June on a quarterly basis.
In terms of budget sectors, the mid-range category (priced between Rs 40-80 lakh) maintained its market share of 28%. The luxury (above Rs 1.5 crore) and premium (Rs 80 lakh-Rs 1.5 crore) segments came close behind with a 27% share apiece.
Despite increasing new supply, existing housing inventory fell by 3% year on year, from 630,000 units in the fourth quarter of last year to 610,000 this year.
“Considering the overall current economic scenario, the momentum in housing sales and new launches across the top seven cities is expected to continue in the October-December quarter,” Puri stated.
