According to housing brokerage firm PropTiger.Com’s report Real Insight, the housing sales rose 50% to 3,08,940 units during this year across eight major cities as compared to 2,05,940 units sold in 2021.
The figures include the sales numbers for all four quarters in both calendar years for the top eight cities, including Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), MMR (Mumbai, Navi Mumbai & Thane) and Pune.
“Despite the industry’s numerous challenges, housing sales have rebounded strongly this year. It is worth noting that the industry is seeing higher demand and favorable sentiments. Despite the steady climb in home loan interest rates, customers have been interested in locking in lower prices rather than fretting about mortgage interest rates, which is also evident from our Consumer Sentiment Survey which indicated that homebuyers have been positive about the economy and their future earnings throughout 2022." said Vikas Wadhawan, Group CFO, PropTiger.com.
New launches witnessed a multi-year high, registering a 6% increase as compared to 2015 levels. Mumbai has been the frontrunner in terms of new supply in 2022, taking a share of 39% in the overall launches, followed by Pune and Hyderabad which took a share of 18% and 19%, respectively.
This improvement in key growth metrics for the sector, the second-largest employment generator in India after agriculture, could largely be attributed to improved consumer sentiment on the back of renewed importance of home ownership during the pandemic, and sustained economic recovery post-pandemic.
“It is important to note that we have seen strong growth across segments, including housing, office, retail, warehouse, data centers, co-working, and co-living. In the post-RERA world, NRI demand for Indian property has also increased and given a boost to Tier – II markets also," said Wadhawan, adding, “significantly higher launches in this quarter also indicate that developers are gearing up for the strong quarter of January to March, which is generally the biggest quarter from a sales perspective."
The data and insights for 2022 suggest that demand has grown both sequentially and yearly in all four quarters of the year. The western markets Mumbai and Pune continued to show maximum traction, taking a combined share of 56% in overall sales in 2022.
A large chunk (26%) of the sales was concentrated in the ₹45 lakh to ₹75 lakh price range. Notably, the share of units in the more than ₹1 crore price bracket has been growing continuously. This price bracket took a share of 22% in 2022, the highest in a decade. In 2022, 21% of the units sold were ready to move in while the remaining 79% were under construction.
In Q4 2022, residential demand was at par with the pre-pandemic levels of 2019. With 80,770 units sold in the final quarter of 2022, the demand registered 19% growth over Q4 2021. While the hike in property prices and interest rates have slowly begun to outweigh positive homebuyer sentiment to an extent and are expected to a have a short-term impact, the overall consumer outlook continues to remain positive.
“2022 has ended with a thumping note for residential realty, and this is only the beginning of the much awaited up-cycle which is being witnessed after a decade. Demand is primarily driven by strong end-users’ interest and the year saw a 50 per cent jump in sales over the previous year signaling the confidence revival in the market," said Ankita Sood, Head of Research, PropTiger.com.
The real estate sector bounced back strongly in 2022, with the resumption of economic activities in full swing. The improvement in sales in 2022 has been instrumental in lowering the inventory burden for India’s real estate developers. Consequently, inventory overhang --- the estimated time builders would take to sell off the existing unsold stock, based on the current sales velocity--- has now declined to 33 months as compared to 42 months in 2021. The inventory overhang is the lowest since 2020.
The unsold inventory stood at 8.49 lakh by the end of 2022 with 80 percent of this stock under various stages of construction. Out of the available stock in the top-8 cities, nearly 20 percent of the unsold units fall in the ready-to-move-in category. Pune, Kolkata and Chennai have the lowest inventory overhang of 26 months, whereas, Delhi NCR continues to have the highest inventory overhang of 61 months.
