According to ANAROCK, a prominent real estate consultancy, the top cities collectively sold around 120,290 units in Q3 2023, highlighting a notable drop in activity. Notably, the Mumbai Metropolitan Region (MMR) led the sales figures, reporting about 36,190 units sold, followed by Pune with approximately 19,050 units. Together, these cities accounted for over 52% of total sales in the quarter. Other cities in the top seven also faced similar declines, indicating a broader trend affecting the residential real estate sector.
Anuj Puri, Chairman of ANAROCK Group, noted the shift in the market dynamics, emphasizing that while sales figures dipped, the continued excess of sales over new launches reflects ongoing demand. The report reveals that the overall new supply of residential properties saw a substantial reduction, with approximately 93,750 units launched in Q3 2024 compared to 116,220 units during the same period in 2023—a significant 19% decrease.
The decline in new supply marks a pivotal change, as this is the first time since the first quarter of 2023 that new launches have fallen below the one lakh mark. MMR remains the dominant player in new supply, introducing around 29,615 units in Q3 2024. Bengaluru follows, contributing approximately 15,915 units. Despite the overall decline in new launches, specific regions like the National Capital Region (NCR) and Chennai experienced significant growth, with increases of 53% and 51%, respectively.
Another noteworthy trend observed in this quarter is the shift in the composition of newly launched homes. The proportion of luxury homes, priced above INR 1.5 crore, reached a record high of 33%. In contrast, the share of affordable housing saw a significant decline, hitting its lowest point at just 13%. This shift suggests a growing demand for premium residential options, potentially driven by changing buyer preferences and income levels.
The existing inventory of residential properties across the top seven cities also reflected a decline, decreasing by 8% annually. The inventory fell from over 610,000 units in Q3 2023 to approximately 564,000 units in Q3 2024. This reduction in available housing stock underscores the challenges in matching supply with the strong demand for residential units.
Price trends in the residential market displayed notable increases, with average residential prices in the top seven cities witnessing a remarkable 23% growth year-on-year. Hyderabad emerged as the city with the highest annual price growth, recording an increase of 32%. Bengaluru and the NCR also saw significant rises, with prices climbing by 29% in both regions. This consistent price escalation signals a robust demand in the face of limited new supply, indicating potential for sustained growth in property values.
The ongoing trends in the real estate sector reflect broader economic sentiments, where affordability continues to be a critical factor influencing buyer behavior. The demand for residential properties remains firm, particularly in established urban centers, despite the challenges posed by fluctuating economic conditions and rising interest rates.
Market analysts suggest that while the decline in sales may be concerning, the fundamental indicators of demand—such as the persistent sales outpacing new launches and rising prices—point to a resilient housing market. The overall economic backdrop, characterized by stable employment rates and increasing urbanization, is likely to support continued demand for residential properties.