New projects contribute most to H1 2024 residential sales

New projects launched in the last six months contribute to one-third of H1 2024 residential sales

Highest ever half yearly launch of ~160,000 residential units; surpassed the previous record high of H1 2023 launches, by 5%

• In H1 2024, premium segment (INR 3-5 crore) launches grew by ~170% Year-on-Year (Y-o-Y), luxury segment (above INR 5 crore) followed with 116% growth.

• Mumbai and Hyderabad led the half yearly launches, collectively contributing around 43% of the overall launches.

• Highest ever half yearly residential sales with around 155,000 units sold during H12024 (Jan-June 2024)

• Bengaluru and Mumbai together accounted for a major share of around 45% in half-yearly sales volume.

Mumbai, July 12, 2024: The number of residential units launched in the first half of 2024 reached a record high of 159,455, according to JLL. This translates to approximately 55% of the total units launched throughout the entire year of 2023. The supply of new residential projects has shown consistent growth this year.

During first half of 2024, majority of the new residential projects launched were in the upper-mid segments (INR 1-3 crore). However, there has been a significant growth in the share of premium and luxury segments compared to the same period in 2023. Developers have adapted their product launches and marketing strategies to meet changing buyer preferences, especially after the pandemic. As a result, there has been a noticeable increase in the supply of high-value projects in the past few quarters. In H1 2024, premium projects accounted for approximately 12% of new launches, while luxury projects accounted for around 6%.

During Q2 2024 (April-June 2024), Bengaluru, Mumbai and Delhi NCR emerged as the top cities in terms of new project launches, accounting for around 60% share. Interestingly, among the three metro cities, Delhi NCR stood out with a significant 64% share in Q2 high-end launches (homes priced INR 3 crore and above) as several prominent developers focused on launching luxury projects in Delhi NCR, particularly in Gurugram.

India's residential market soars to unprecedented heights

^{Source: Real Estate Intelligence Service (REIS), JLL Research}

Note: Mumbai includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai; Delhi NCR includes Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad and Sohna.

Data includes only apartments. Rowhouses, villas, and plotted developments are excluded from our analysis.

“The current year has witnessed an impressive increase in both launches and sales momentum, with approximately 54-57% of last year's total volume already achieved in just half a year. The consistent growth can be attributed to the successful launch of strategically tailored products by developers who have carefully assessed market demand and dynamics. Interesting to note, sales momentum has successfully complemented the new launches with around 30% of the H1 2024 sales (154,921 units) being contributed by projects that got launched during the last six months. Listed and reputed developers, consistently bringing in a substantial supply over the past few years have played a key role in this growing trend,” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
 

Premium segment residential market surges with a remarkable 169% Y-o-Y increase in H1 2024

^{Source: Real Estate Intelligence Service (REIS), JLL Research}

“There has been a notable surge in launches within the premium segment (priced between INR 3-5 crore) and luxury segment (priced above INR 5 crore) compared to other segments. In H1 2024, launches in the premium segment surged by 169% Y-o-Y, followed by a 116% Y-o-Y increase in luxury segment launches. On the contrary, the mid segment projects (priced between INR 50 lakh -1 crore) experienced a 14% Y-o-Y decline during the same period. This speaks about developers’ active response to the surge in demand for high value homes among the target clientele,” said Siva Krishnan, Senior Managing Director (Chennai & Coimbatore), Head - Residential Services, India, JLL.

Residential prices continue to move upwards.

Q2 2024 continued to witness residential price growth in the top seven cities (Delhi NCR, Mumbai, Chennai, Hyderabad, Bengaluru, Pune, Kolkata) of India, with Y-o-Y price increase ranging from 5% to 20%. The highest price increase was observed in Delhi NCR, with a significant jump of approximately 20%, while Bengaluru followed closely with around 15% increase.

While Bengaluru has been witnessing around 15% growth Y-o-Y over the last few quarters, around 28% of its Q2 2024 new launches being sold out during the same quarter has acted as a driver for Y-o-Y price growth during the quarter. Furthermore, capital value increase at Whitefield and North Bangalore locations have acted as a catalyst. Availability of under-construction inventory in these cities getting restricted, is resulting in subsequent surge in prices. In response to the high demand for newly launched projects, developers are as well launching new phases of existing projects at elevated price levels, resulting in overall property price growth.

H1 2024 residential sales reached around 57% of total annual sales in 2023, indicating strong growth trend.

Residential sales momentum continued to be on a high growth curve in the first half of 2024 driven by strong supply from reputed developers, favourable economic conditions, and positive buyer sentiments. The period recorded highest ever half yearly sales, with a remarkable 22% increase compared to the same period in 2023, totalling 154,921 units. This upward trajectory in demand paves the way for sustained growth in the residential market. Most of the cities witnessed robust y-o-y growth in sales volume with the markets of Bengaluru, Mumbai, Pune, and NCR accounting for around 80% share in half-yearly sales.

^{Source: Real Estate Intelligence Service (REIS), JLL Research}

In line with the trend observed in launches, in the first half of 2024, the sales of premium category projects (priced between INR 3-5 crore) saw a remarkable Y-o-Y growth of around 160%. Similarly, the luxury segment (priced above INR 5 crore) also experienced a significant sales increase of 60% compared to the same period in the previous year.

Months to liquidate the housing inventory declines by 20% Y-o-Y.

As of Q2 2024, unsold inventory across the seven cities increased marginally on a Y-o-Y basis as launches outpaced sales. However, it is interesting to note that months to sell has declined Y-o-Y from 30 months in Q2 2023 to 24 months in Q2 2024.

Looking Ahead: Growth momentum continues

The outlook for residential sales in 2024 remains positive, with an expected range of 315,000 to 320,000 units. This projection is based on the sustained growth momentum in the market. Additionally, supply is expected to match the demand as established developers are acquiring land in prime locations and growth corridors to launch their projects in the near to medium term. Some developers are also considering expanding their portfolio and entering new markets to increase their presence nationwide.