India Residential Market Dynamics-Q4 2024

India's residential real estate market demonstrated exceptional performance in 2024, characterized by unprecedented sales volumes and new project launches. The sector witnessed a notable shift towards high-end properties, with a surge in demand for premium and luxury segments. Additionally, residential property values experienced substantial appreciation across India's major urban centers, underscoring the robust nature of the housing market throughout the year.

The housing market experienced a landmark year with sales soaring to a new all-time high of around 303,000 residential units. Launches hit an all-time high with developers unveiling a record-setting ~302,300 new units across the country's seven largest cities, nearly mirroring the unprecedented sales volume.

In the fourth quarter of 2024, residential property sales reached 72,930 units across India's top cities. Majority of these sales were concentrated in three major urban centers - Bengaluru, Mumbai, and Pune - which collectively accounted for approximately 64% of the total quarterly sales volume. During 2024, most of the top 7 cities achieved record-breaking sales which may be attributed to the strong faith that both investors and end-users have in the long-term potential of the residential sector in these urban centers. Their confidence has significantly boosted housing sales, contributing to the remarkable year for the residential asset class across India's major cities.

For the first time in India's residential real estate market, properties commanding prices over INR 10 million constituted more than half of the total annual sales. This unprecedented shift reflects both an increased consumer appetite for high-quality housing and an overall rise in property values. Buyers demonstrated a greater readiness to invest in premium residences, driving this significant change in the market's composition.

An expanding population of high-net-worth individuals, rising levels of disposable income, shifting buyer preferences towards larger living spaces, technologically advanced and future-proof residences served as key drivers, stimulating the market for upscale housing options across cities. Delhi NCR emerged as a key driver of this trend, with the premium and luxury segments accounting for a significant portion of its 2024 annual sales.

A notable trend during 2024 was the increased focus of developers on high-end housing launches, responding to rising demand for luxury living spaces. The technology-driven cities of Bengaluru, Chennai, Hyderabad, and Pune emerged as major contributors to the residential supply momentum.

India’s residential market is experiencing an upward trend in property values, driven by high demand for housing and the introduction of high-quality new projects. This price appreciation is widespread, affecting a range of projects that are in high demand and have limited available units. Developers are capitalizing on this trend by launching new phases of popular projects at higher price points compared to earlier phases.

The real estate market in India demonstrated increased buyer confidence and sales momentum in 2024. This is evidenced by the fact that a larger proportion of newly launched residential units were sold within the same year of their launch. This increase in the quick absorption of new launches indicates a strengthening housing market and growing buyer enthusiasm.

In 2024, the residential investment landscape in India shifted significantly. Unlike 2023, when investors preferred structured debt for its lower risk and predictable returns, 2024 saw a surge in equity investments. Equity contributions accounted for 54% of total sector investments, signaling increased investor confidence in the residential sector's growth potential and capacity for higher returns.

After a year of unprecedented sales and launches in 2024, the residential real estate market is poised for continued robust performance and geographical expansion with growth extending beyond traditional urban centers into peripheral and emerging urban areas. The surge in premium home demand is particularly notable and expected to maintain its strong momentum in 2025, building upon the record-breaking performance of the previous year.