Residential sales set to soar: Projected 260k units by end of 2023, highest since 2008

Mumbai, December 21, 2023: In the year 2023, India’s residential sector continued to break new records and is expected to register highest sales since 2008 at around ~260,000 units. The growth momentum currently seen is expected to be carried forward in 2024 as well according to JLL’s recent report titled ‘2023: A Year in Review’.

The residential market is experiencing a strong demand and ample supply, indicating its resurgence and continued growth this year. Residential sales in first nine months of 2023 reached 196,227 units, which is 91% of the total sales in 2022. It is interesting to note that residential sales broke all records with average quarterly sales of over 65,000 units till the third quarter of 2023. In 2024, we expect residential sales to be around 290,000 to 300,000 units on the back of robust demand and quality launches.

In 9M 2023, there was a significant increase in launches, reaching a record of 223,905 units, showing a healthy year-on-year growth of 21.5%. It is anticipated that by the end of 2023, we can expect around 280,000 launches. Furthermore, the robust supply pipeline from reputable developers indicates that the launches will continue to be strong in 2024, with an estimated range of 280,000-290,000 units.

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

“Despite the increase in home loan interest rates and rising prices, the overall sentiment in the domestic housing market remains positive, with homebuyers maintaining an upbeat attitude towards purchasing homes. In 2023, residential sales are expected to surpass 260,000 units and launches 280,000 units to reach historic high post 2008. There is a possibility of policy rate cut in 2024 provided the GDP growth and inflation support such a stance of RBI. In that scenario, we would likely see a further growth trajectory in the residential sector. In 2024, we expect the residential sales in the primary market to be around 290,000 to 300,000 units. Also, the sales guidance shared by various established developers reflect robust sales which is expected to get healthy response from the buyers.” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

It is pertinent to note that during Jan to Sep 2023, 71% of the residential sales (~138,925 units out of total sales of 196,227) were recorded in projects that were launched during Jan 2022 to Sep 2023. Attracted by quality products launched by developers, the risk appetite for consumers is increasing for under-construction projects since these projects are getting executed and delivered within stipulated timelines.

Premium segment records growth in sales in 2023

Mid segment price category (INR 50 – 75 lac) has dominated 9M 2023 sales like 9M 2022. However, share of premium segment (above INR 1.50 crore) has increased from 18% in 9M 2022 to 22% in 9M 2023. Delhi NCR and Mumbai have recorded maximum sales in first nine months of 2023 in the premium segment.

Luxury segment (priced above INR 3 crore) sales went up by 83% from 8,013 units in 9M 2022 to 14,627 in 9M 2023. With homebuyers upgrading to bigger sized homes, developers are launching such projects taking cognizance of this demand trend.

Trends to look forward to in 2024:

“We expect the residential market to remain buoyant and ride the next wave of growth and expansion with a good response from buyers in mid and premium segment. Demand for residential apartments to be backed by a robust supply pipeline with many branded developers having announced new launches and their entry into newer markets. Launches will continue to be strong in 2024, with an estimated range of 280,000-290,000 units” said Siva Krishnan, Sr. MD - Chennai & Coimbatore, Head of Residential, India.

• Despite an election year in 2024, demand drivers likely to pave the way for a strong north-bound growth trajectory.

• Developers have realigned their marketing strategies based on the current market dynamics, and this is clearly getting reflected in increasing number of launches in the higher ticket size projects.

• Strategic land acquisitions at prime locations and along growth corridors in cities is expected to strengthen the supply inflow across cities.

• Launch of diversified products to gain momentum including plotted developments, low rise apartments, row houses and villaments.

Note: Data includes only apartments and for top 7 cities of India. Row houses, Villas, and Plotted developments are excluded from our analysis. Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai.

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of close to 12,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in.