- Samantak Das
- Rohan Sharma
- Shweta Kakkar
The confluence of progressive government policies, infrastructure growth, and robust launches led to growth in residential sales in the first quarter of 2023. The residential market recorded sales of over 62,000 units in Q1 2023, an increase of 15% sequentially and 20% y-o-y, across the top 7 cities of India. In fact, this is the highest quarterly sales in the last 15 years demonstrating enhanced consumer confidence despite the global headwinds.
Trends in the residential segment in Q1 2023
Sales of the premium segment apartments are on a strong footing
The premium segment is particularly catching the buyers’ attention as the apartments priced above INR 1.5 crore had a share of 22% in the overall sales. There is rising demand for bigger homes with good amenities and support infrastructure. However, it is pertinent to note that the INR 50 lakh—75 lakh category still dominated with one-quarter share in the in Q1 2023 sales.
It is interesting to note that the share of the affordable segment in quarterly sales in Q1 2023 has declined as compared to the previous year. The share of apartments priced below INR 50 Lakh in quarterly sales has declined from 22% in Q1 2022 to 18% in Q1 2023. On the other hand, the share of the premium segment (priced above INR 1.5 crore) has seen an increase from 18% to 22%.
New launches in Q1 2023 highest in over a decade
Quarterly residential launches in Q1 2023 at 75,000 units are the highest in over a decade and next to the previous high of 82,757 units in 2012. New launches in the quarter increased across the top seven cities. Encouraged by robust sales and strong economic fundamentals, developers launched residential projects across the top seven cities of India. Compared to the previous quarter, new launches in Q1 2023 witnessed a growth of 19%.
Residential launches witness growth in the premium segment
Most of the launches in the quarter were in the premium segment (27%) (apartments in the price bracket of over INR 1.50 crore). It has increased from around 13,000 units in Q1 2022 to over 20,000 units in Q1 2023. The larger markets like Delhi NCR (52%) and Mumbai (33%) recorded maximum sales in apartments priced above INR 1.50 crore.
Bengaluru, Mumbai, and Pune together account for 61% of the quarterly sales
Bengaluru led the quarterly sales with a 21% share followed by Mumbai with a 20.9% share.
Pune was not far behind as it contributed 19.4% of the quarterly sales. All these three markets also saw heightened activity in terms of new launches. Delhi NCR also posted impressive sales numbers as it saw robust launches by established developers, particularly in Gurugram.
Average price increase witnessed across the top seven cities
The affordability synergy that was prevailing 10 months ago has been facing some challenges. With the increase in the repo and home loan interest rates, along with a rise in residential prices across the top seven cities of India in the range of 4-12% y-o-y, the cost of acquisition for home buyers has increased. The rise in prices is seen across the spectrum of projects that have high demand and less ready-to-move inventory. New phases of existing projects are also getting launched at higher prices.