With 161,000 units sold in Ql-Q3 2022, residential sales surpassed the annual sales post-2014, says a report
Riding on growing demand from buyers, residential sales during the nine months of January-September 2022 (Q1-Q3 2022) surpassed the annual sales post 2014 re-cording 161,000 units, according to JLL’s Residential Market Update – Q3 2022. The annual sales in 2014 were at 165,791 units. The market has registered strong sales backed by robust consumer demand and quality launches by the developers. Quarterly residential sales have seen a revival since Q3 2021 which has further gained momentum this year with sales of over 50,000 units in each of the first three quarters of 2022. With the onset of the festive season, strong sales are expected in the upcoming quarter and as a result, annual sales in 2022 are expected to be more than 200,000 units.
On a sequential basis, sales improved by 7 per cent during Q3 2022 with 56,658 units sold. In fact, this is the highest quarterly sales post-Q4 2010 (sales stood at 59,825 units in Q4 2010). “We have witnessed a pick-up in sales due to enhanced consumer confidence amidst the steady revival of the Indian economy depicting the immense growth potential of the residential market. Projects launched by reputed developers witnessed good traction by end users. The larger markets of Bengaluru and Mumbai led the sales in the quarter contributing 41% of the total quarterly sales as they also saw substantial launches. This was followed by Delhi NCR which contributed 19 per cent of the quarterly sales,” says Siva Krishnan, MD & head of Residential Services, India, JLL The strong consumer demand is manifesting itself in the form of strong sales in the affordable and mid categories as well as in the premium segment.
Raunika Malhotra, president, marketing, Lodha, says, “The importance of owning a home has emerged stronger more than ever. We have witnessed that consumers are looking for finest quality developments that provide with great construction quality and capable of timely delivery. As festivity is all about celebrations, curating memories with loved ones and gifting, what better than giving our family a great home that not only provides security, but also a better life.”
“Due to cost-push inflation and robust demand, there is a rise in residential prices with the capital value showing a 3-11 per cent Y-o-Y increase across all cities. New launches have also entered the market at higher prices in some cities. Hyderabad witnessed the maximum appreciation in prices to the tune of 11 percent on a yearly basis while in Pune prices increased by around 3 per cent. Also, the increase in the repo rate has resulted in an increase in mortgage rates. How-ever, the interest rate after this hike would be still below what the homebuyers had to pay 8 to 9 years back. We believe that home loan interest rates inching towards 9 per cent and above may result in moderation of housing sales growth in the medium term,” says Samantak Das, chief economist, and head research & REIS, India, JLL.
NEW LAUNCHES CONTINUE TO SEE UPTICK
With festive season midway, developers continued to launch residential projects to tap into the growing demand by home buyers. The top 7 cities under consideration witnessed new launches of 62,000 apartment units in Q3 2022, an increase of 3 per cent Q-o-Q. More than half of the launches were in the price bracket between 50 lakh-1 crore. Premium segment apartments (above 1.50 crore) saw 11 per cent of the launches in the quarter. In Q3 2022, unsold inventory across the seven cities increased by 1.3 percent as new launches outpaced sales. Mumbai, Bengaluru, and Delhi NCR together account for 63 per cent of the unsold stock. An assessment of Years to Sell (YTS) shows that the expected time to liquidate the stock has declined from 3.6 years in Q2 2022 to 3.1 years in Q3 2022, an indication of robust sales growth.
FESTIVE BOOST
■ Quarterly sales (Q3, 2022) grew by 7% as compared to Q2 2022 at 56,658 units
■ Total sales are likely to exceed 200,000 units by end of 2022 which will be the highest annual sales post-2010 (sales stood at 216,762 units in 2010)
■ Bengaluru led the quarterly sales, contributing 21 % followed by Mumbai (20%) and Delhi NCR (19%)
■ A healthy off take of units in the premium segment with apartments in the 1.5 crore plus price tag at 19% share
■ 51 % of the sales in this quarter are from units in the price bracket of up to 75 lakh
(Source: Estate Intelligence Service (REIS), JLL Research)
LOOKING AHEAD: STRONG GROWTH AHEAD
The residential market’s inherent strength and the rising importance of home ownership will lead to its continued growth momentum. With the upcoming festive season, both launches and sales are expected to see an uptick. Apart from the affordable and mid-segment, the traction is expected to take place in the premium segment as well backed by launches by developers in prime locations.
Talking about the upbeat sentiment, Nikhil Jain of Ramprastha Group, says, “Real estate market is looking strong. There is lot of demand from actual buyers which represents strong fundamentals. With our government focusing on in-creasing manufacturing base in the country, there will be huge demand push.”
The preference of buyers for developers with a proven track record will increase transparency and drive the sector’s next phase of growth. The home loan interest rate in the last six months has gone up by around 130-140 bps. Moreover, the residential price is facing upward pressure due to cost-push inflation, says the report.
