After an excellent start to 2024, residential real estate sales are showing a tapering trend as we approach the middle of the year. According to a recent report by the real estate consultancy firm ANAROCK, residential sales across the top seven cities declined marginally in the second quarter of 2024. This slowdown is attributed to rising property prices and the high base record set in the first quarter of 2024.
Residential real estate sales in Q2 2024 saw approx. 1.20 lakh units sold in the top 7 cities, against the all-time best of 1.30 lakh units in Q1 2024. Among top 7 cities, only NCR saw a 6% quarterly rise in sales with approx. 16,550 units in Q2 2024 against 15,650 units in Q1 2024; on a yearly basis, NCR witnessed a 1% jump.
ANAROCK Research data reveals that housing sales witnessed a quarterly drop of 8% and stood at approx. 1,20,340 units in Q2 2024 across the top 7 cities, against approx. 1,30,170 units sold in Q1 2024. However, on a yearly basis, there has been a 5% rise in residential sales.
The two western cities - MMR and Pune - accounted for over 52% of the total sales in the top 7 cities with over 62,685 units sold altogether in these cities in Q2 2024. NCR is the only city to see a quarterly rise (of 6%) in housing sales in the quarter against Q1 2024.
New launches across the top 7 cities continued to break previous records with a 6% Q-o-Q rise – from approx. 1,10,870 units in Q1 2024 to approx. 1,17,170 units in Q2 2024. MMR and Pune saw the maximum new supply, accounting for 54% of the total new launches across the top 7 cities. Individually, the two cities saw 31% and 1% quarterly increases in their new supply, respectively.
The outlier was NCR, which witnessed a 134% Q-o-Q jump in new supply in Q2 2024 against Q1 2024.
According to Anuj Puri, Chairman – ANAROCK Group, "The quarterly decline seen in housing sales is essentially because of the all-time high base considered in the previous quarter, when more than 1.30 lakh units were sold. Most importantly, this drop is also due to the significant hike in property prices over the last one year, which in turn has prompted many investors to take a breather. Data indicates that average residential prices have seen a quarterly jump of 7% while annual rise of a significant 25% in the top 7 cities."
"NCR witnessed the highest quarterly jump of 10% in Q2 2024 while Hyderabad saw the highest yearly jump of 38% in average residential prices," says Puri. "However, if prices are kept in check henceforth, housing sales may not be majorly impacted in the upcoming quarters,” Puri added.
The top 7 cities recorded approx. 1,17,170 new units launched in Q2 2024, against approx. 1,10,870 units in Q1 2024 - increasing by 6% over the previous quarter. The key cities contributing to new launches in Q2 2024 were MMR (Mumbai Metropolitan Region), NCR, Pune, and Bengaluru, which together accounted for 82% of the supply addition.
MMR saw approx. 44,120 units launched in Q2 2024 – increasing by 31% over Q1 2024 and over 2% on yearly basis. More than 64% new supply was added in the sub-₹80 lakh budget segment.
Pune added new supply of approx. 18,920 units in Q2 2024 compared to approx. 18,770 units in Q1 2024 – an increase of 1%. On a yearly basis, the city recorded a 11% decline in new supply. Over 73% of the new supply in Q2 2024 was added in the mid and premium segments (units priced between ₹40 lakh to ₹1.5 Cr.)
Hyderabad added approx. 13,750 units in Q2 2024, a quarterly decline of 40% but a 31% rise against the corresponding period in 2023. Over 69% of the new supply in Q2 2024 was added in the mid and premium price segments.
Bengaluru added approx. 16,020 units in Q2 2024, declining quarterly by 3%. On a yearly basis, there was 40% rise. Approx. 83% of the new supply was added in the premium and luxury segments (INR 80 Lakh onwards) combined.
NCR saw a whopping 134% increase in new launches against Q1 2024, with approx. 17,030 units launched in Q2 2024. A whopping 82% of the new launches in second quarter this year were in the luxury segments priced >₹ 1.5 Cr.
Chennai added approx. 5,180 units in Q2 2024, a quarterly decline of 29% against Q1 2024 and a yearly increase of 3% over Q2 2023. Over 93% was added in the mid and premium segments.
Kolkata added approximately 2,150 units in Q2 2024, a decrease of 50% over Q1 2024 and 13% drop against Q2 2023. Approx. 64% new supply was added in the mid segment priced between ₹40 lakh – ₹80 lakh.
When we give a closer look at the overall Sales numbers: Approx. 1,20,340 units were sold in Q2 2024 across the top 7 cities – a quarterly decline of 8% over Q1 2024. NCR, MMR, Bengaluru, Pune, and Hyderabad together accounted for 92% sales in the quarter. On a yearly basis, the top 7 cities recorded a 5% increase in housing sales with approx. 1,15,090 units sold back in Q2 2023, says ANAROCK.
On the price movement, the report adds that the average residential property prices across the top 7 cities increased in the range of 4-10% in Q2 2024 when compared to Q1 2024 amid high residential sales. NCR recorded the highest quarterly jump of 10% with the average price at ₹6,800 per sq. ft. as of Q2 2024-end.
“On a yearly basis, the top 7 cities recorded a significant average price rise of between 13 - 39%. Hyderabad recorded the highest yearly jump of 39% in average residential prices in Q2 2024 against Q2 2023,” report said.
Talking about the industry trends, Aakash Ohri, Jt. Managing Director & Chief Business Officer, DLF Homes said, "There is an unprecedented surge in the demand for homes, which has reached an all-time high in the past two years, particularly in the aftermath of COVID. This surge underscores a fundamental shift in people's perception of homeownership, where the value of having a place to call home has become more apparent than ever before. Residential real estate has not only served as a sanctuary for end-users but has also emerged as an attractive investment avenue. The substantial returns offered by residential properties, especially luxury homes, have fueled an increasing trend of purchasing homes for investment purposes. Within NCR, Gurugram, in particular, has emerged as a preferred choice for luxury homebuyers, with large presence of HNIs and UNHIs base and a significant rise in the number of affluent millennials in the region, who prefer to stay close to work, and are willing to go the extra mile for their convenience and indulgent lifestyle. There has also been a newly stirred up insistence on luxurious integrated townships that offer affluent homes, safety, and security to the homebuyers."
Similarly, Vivek Singhal, CEO, Smartworld Developers added, “Delhi NCR’s luxury real estate market is experiencing significant demand for luxury housing and independent floors. This demand is driven by millennials looking for a lifestyle of convenience. Gurugram has played a key role in the surge of launches in Delhi NCR. Its proximity to major hubs, along with careful planning that focuses on creating complete living experiences, has made it a premier choice for homebuyers. The presence of thriving commercial centres, strong social infrastructure, and excellent connectivity has established Gurugram as a top real estate destination. Homebuyers are not just investing in properties; they are investing in a lifestyle marked by exclusivity, connectivity, and sustainability.”
It is to be seen whether sales pick up in the later half of the current year or not.
