Residential Market Update: Q3 2022

Residential sales during the first nine months of 2022 (Jan-Sep 2022) surpassed the annual sales post 2014 recording 161,000 units. The annual sales in 2014 was at 165,791 units. The market has registered strong sales backed by robust consumer demand and quality launches by the developers. With the onset of the festive season, strong sales are expected in the upcoming quarter and as a result, annual sales in 2022 are expected to be more than 200,000 units. This will be the highest annual sales post-2010 when the sales stood at 216,762 units.

The trend of increase in new supply continued and as many as 184, 000 units were launched during the first nine months of 2022. This is the highest number of new launches after 2015 when around 197,000 units were launched. It is expected that the supply pipeline will remain robust in the upcoming festive quarter as well.

Trends in the residential segment in Q3 2022

Sales continue to be on an upward trajectory

On a sequential basis, sales improved by 7% during Q3 2022 with 56,658 units sold. In fact, this is the highest quarterly sales post-Q4 2010 (sales stood at 59,825 units in Q4 2010). Quarterly residential sales have seen a revival since Q3 2021 which has further gained momentum this year with sales of over 50,000 units in each of the first three quarters of 2022. There has been a pick-up in sales due to enhanced consumer confidence amidst the steady revival of the Indian economy depicting the immense growth potential of the residential market.

New launches continue to see an uptick

With the festive season around the corner, developers continued to launch residential projects to tap into the growing demand by home buyers. The top 7 cities under consideration witnessed new launches of 62,000 apartment units in Q3 2022, an increase of 3% Q-o-Q.

Residential launches active in the mid as well as premium segment

Backed by strong buyer demand, developers were quite active in launching apartments in both mid and premium segments. Around 54% of the launches were in the price bracket between INR 50 lakh-1 crore. A sizeable proportion of new supply was also recorded in the price bracket of above 1 crore reflecting the buyers’ aspirations to upgrade to bigger and premium homes with better amenities.

Bengaluru, Mumbai, and Delhi NCR account for 60% of sales

Bengaluru contributed 21% of the sales activity during the quarter, followed by Mumbai with 21% and Delhi NCR accounting for 19%. In absolute terms, Bengaluru clocked sales of 11,994 units in the quarter followed by Mumbai with 11,487 units and Delhi NCR with 10,660 units. If we analyze the quarterly sales growth data, except Mumbai all the cities have seen an increase in sales as compared to the previous quarter. New launches by reputed developers saw good responses from buyers indicating robust demand despite an increase in mortgage rates and property prices.

Hyderabad, Bengaluru, and Mumbai account for 71% of the new launches

Most of the launches during the quarter were witnessed in Hyderabad (27%) followed by Bengaluru (23%) and Mumbai which had a share of 21%. The launches are expected to accelerate further in the upcoming festive quarter as established developers are launching projects in both prime locations as well as emerging residential corridors. The trend of launching plotted developments and independent floors is expected to continue with buyer preferences aligned towards such products while developers get the advantages of faster execution, quick delivery, and inventory liquidation