The Mumbai Metropolitan Region (MMR) and Pune have emerged as the driving forces of the real estate market in India’s seven largest cities. These two regions alone contribute to more than half of total real estate sales and have a significant 51 percent share, according to data from Anarock Research. This underscores the robust demand and appeal of these cities to homebuyers and investors alike, where an incredible 58,770 units were sold. This demonstrates the resilience and potential of the real estate market in these regions, fueled by factors such as infrastructure development, employment opportunities and a thriving urban lifestyle.
The rising interest rates on home loans, having increased by a total of 2.5% since May 2022, have not deterred homebuyers, and the bull market in the Indian housing market continues in the second quarter of the year. Quarterly residential sales in the seven largest cities are at an all-time high of about 1,15,100 units sold in the second quarter of 2023, up 36% annually from about 84,940 units sold in the second quarter of 2022, the study reports.
Meanwhile, on the new launches front the top 7 cities MMR, Pune, Bangaluru, Hyderabad, NCR, Chennai and Kolkata have once again crossed the one lakh mark, registering a 25% annual increase from 82,150 units in Q2 2022 to over 1,02,610 units in Q2 2023.
Key cities contributing to new launches in Q2 2023 included MMR (Mumbai Metropolitan Region), Hyderabad, Pune and Bengaluru, which together accounted for 84% of supply. Interestingly, MMR and Pune again recorded the highest number of new listings, accounting for 63% of total new listings in the seven largest cities. Individually, the two cities recorded 31% and 29% annual growth in new listings, respectively. According to the report, Pune saw the highest increase in the number of units sold at 65%. In the second quarter of 2023 about 20,680 units were sold. MMR saw a 48% increase in residential sales with 38,090 units sold, while Bengaluru saw a 31% increase with 15,050 units sold in the second quarter.
MMR and Pune’s dominance in the residential market shows that they are considered prime investment destinations, attracting both domestic and international buyers. With a diverse range of properties, including luxury flats, affordable housing and commercial spaces, these cities appeal to a wide spectrum of buyers with different preferences and budgets. The continued growth and prominence of MMR and Pune in the real estate sector reflect the cities’ ability to provide a conducive environment for individuals looking to own their dream home or make profitable investments. As demand for housing continues to rise, these regions are expected to maintain their pre-eminence and drive the overall growth of the real estate market in India’s major urban centres.
Anuj Puri, Chairman, ANAROCK Group, says “ The housing market is yet to feel the impact of the home loan rate hike early this year, and of the global economic headwinds. It continues to be on a roll with the momentum remaining strong even in the second quarter of 2023. Housing sales in the top 7 cities broke the previous high record of Q1 2023 and stood more than 1.15 lakh units in Q2 2023. Pune and MMR were the only two cities to see quarterly rise in housing sales of 4% and 10% respectively while other cities saw some dip. But on yearly basis, most top 7 cities saw significant jump in housing sales.”
Average property prices in the 7 largest cities have risen by 8% annually Hyderabad recorded the biggest jump of 10%, while Bengaluru, NCR and MMR each saw a rise of 9%. In MMR, around 43,390 units were launched in Q2 2023, an increase of 31% over Q2 2022. More than 61% of the new supply was launched in the sub-80 lakh price segment.
As per the Anarock report NCR is the only city where flat sales have shown only single-digit annual growth (of 7%) compared to all other cities: from 15,340 units in Q2 2022 to nearly 16,450 units in Q2 2023. In Kolkata, flat sales grew by 20% compared to Q2 2022, with approx. 5,780 units sold in Q2 2023. Hyderabad recorded sales of approximately 13,570 units in Q2 2023, an increase of 21% over Q2 2022, followed by Chennai, where approximately 5,490 units were sold in Q2 2023 – an increase of 44% over Q2 2022
The report also mentioned that the average residential property prices in the seven largest cities increased by 6-10% in Q2 2023 compared to Q2 2022, mainly due to increase in construction commodity prices and overall increase in demand. Hyderabad recorded the highest annual increase of 10% and stands at INR 4,980 per square metre at the end of 2Q2023, although the number of new flats brought to the market this year increased by 51% to 10,470 units in 2Q2023
Amid robust sales, available inventory in the top 7 cities declined 2% on an annual basis to about 6.14 lakh units at the end of Q2 2023. The NCR witnessed the steepest annual decline of 21% amid lower new supply from over 1.41 lakh units at the end of Q2 2022 to nearly 1.11 lakh units at the end of Q2 2023. This is a significant decline in this real estate hotspot
-SURESH RATHOD
