The Indian housing market has once again defied odds, scaling new heights in the first quarter of the year despite the backdrop of rising mortgage rates and escalating prices. This growth, driven by robust demand and strategic supply from key regions, reflects a resilient realty sector poised for a promising future.
Market Dynamics:
According to a recent Economic Times report, which cites data from JLL India, the first quarter witnessed a record-breaking 74,486 apartments sold across the top seven markets. This marks the second consecutive quarter where sales have exceeded 74,000 units, following a record 75,591 apartments sold in the December quarter.
The Mumbai Metropolitan Region, Bengaluru, and Pune have emerged as leaders, contributing to 64% of the total sales. Notably, Bengaluru and Pune showed the highest sales in the Rs 50 lakh to Rs 75 lakh price segment, while Mumbai recorded the most sales in the Rs 1.5 crore to Rs 3 crore range.
Economic Factors:
Stable economic conditions, along with positive buyer sentiment and offerings from established developers, have significantly fueled these sales. Despite home loan rates hovering around 9%, analysts are optimistic, expecting a decrease in rates in the second half of the year, which could further stimulate the housing demand.
Also Read: Bank of Baroda Hikes Lending Rate By 5 Basis Points For Select Tenures
Changes in Sales Distribution:
The distribution of sales has seen a noticeable shift, especially in the luxury segment, where apartments priced above Rs 3 crore have more than doubled their market share from 5% in the first quarter of 2022 to 11%. However, the Rs 50 lakh to Rs 75 lakh segment continues to dominate overall sales, highlighting a diverse buyer interest across different market levels.
Industry Outlook:
The industry outlook remains positive with expectations of continued growth momentum into 2024. JLL India forecasts residential sales to reach approximately 300,000 to 315,000 units next year, spurred by the ongoing growth dynamics.
Price Surge and Inventory Levels:
Residential prices in the top seven cities have maintained an upward trajectory, increasing by 3% to 15% compared to last year. Bengaluru and the Delhi NCR witnessed the highest hikes, approximately 15%. Despite these price surges, limited inventory availability has also played a crucial role in driving up prices. As of March, the unsold inventory in these cities has seen a marginal increase, with Mumbai, Bengaluru, and Hyderabad accounting for the majority of it.
Conclusion:
The Indian property market’s resilience is evident from its sustained growth despite higher costs and economic uncertainties. For stakeholders in the real estate sector, including businesses and entrepreneurs, these trends underscore the importance of timely and informed decision-making in investment and financing.
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