Indian Residential Properties Doing Great in H2 2024

As 2024 winds down, it is a good time to pause, turn around and see how far the Indian residential real estate market has come this year. By all accounts, it is a remarkable feat, with continuing steady growth over the last few years. Though there has been a slight dip in housing sales and new launches, Q3 2024 marks a shift toward a more stabilized stance. The housing market has been resilient and there have been no major setbacks or challenges on the journey.

In fact, the industry might well record 2024 as a year of record-breaking deals in the Ultra-Luxury Property segment.

Breaking the Luxury Housing Glass Ceiling

Like we said, India’s luxury real estate market has been making the right sort of waves with several high-value property transactions.

Infosys founder NR Narayana Murthy recently purchased another apartment in Bengaluru‘s Kingfisher Towers for ₹50 crore. The sale of this ultra-luxurious apartment set a new benchmark price of ₹59,500 per square foot in the city’s upscale Central Business District. Earlier this year, Ajit Isaac created a record of sorts with his ₹67.5-crore purchase in Bengaluru’s Billionaire Street at ₹70,300 per square foot.

In glamourous Mumbai, some areas do command carpet area prices of up to Rs 1.62 Lakhs per square foot.  One of the costliest apartment transactions in recent times was the purchase of three apartments in Mumbai’s Lodha Malabar for Rs 263 crore at Rs 1.36 Lakhs per square foot (carpet area). But, Mumbai, traditionally the leader in India’s luxury real estate, is now lagging behind the National Capital Region in this pricey segment.

In India’s Millenium City, Gurugram, DLF Camellias saw a record-breaking ₹190-crore penthouse sale last month, translating to ₹1.82 lakhs per square foot on carpet area. And this is not all – the new DLF Dahlias project has 400 bare-shell units priced between Rs 60 crore and Rs 100 crore, and a significant number were sold in the pre-launch phase itself.

Residential Market is Increasingly Luxurious

While these are just a few examples of high-profile transactions, there is definitely a clear shift in buyer preferences toward larger, premium properties. Proving the adage that your home is your castle, buyers shelled out big bucks (₹1.5 crore +) for properties, and this segment saw the largest share of new launches at 33%. Cities like Hyderabad and NCR emerged as hotspots for high-end and ultra-luxury housing, reflecting a growing demand for premium homes.

Gurugram alone has a healthy market – cases in point are the several phases of DLF Privana, Eldeco Fairway Reserve, Max Estate 360 and many more.

Meanwhile, affordable housing saw its lowest share at just 13% overall. Homebuyers in Kolkata and MMR preferred affordable housing, with 37% and 35% of their new launches in this segment.

What does this mean?

There is a strong demand for world-class projects from India’s growing ultra-wealthy demographic and in response, developers are increasingly reaching higher in design, amenities, and price. And these transactions prove the resilience of Indian real estate, while also marking a new era of opulence and exclusivity. As more ultra-luxury projects hit the ground with no signs of cold feet among buyers, it seems this trend is here to stay.

Move over, New York – Gurugram is now the new kid on the block.

The Affordable to Luxury Housing Segment

Well, NCR has seen a continued interest in the ultra-luxury segment, but that is not all that is glittering in the country’s housing market. Let’s crunch the numbers.

Anarock reports that about 1.07 lakh housing units were sold in Q3 2024 – this is a year-on-year decline of 11%. The good news is that despite this, sales still outpaced new launches in the same period, indicating strong demand in the market. Mumbai Metropolitan Region (MMR) and Pune were the key drivers along with NCR and Bengaluru, which accounted for 80% of the sales during the quarter.

As for the dip itself, there were solid contributing factors, which are seasonal, such as the monsoon and the “pitru paksh” period, often considered inauspicious/unsuitable for property transactions.

Sustained Growth in Price

All the top eight Indian cities saw prices going up, with the average housing price reaching an average of ₹11,000 per square foot. This is an 11% increase and is the 15th consecutive quarter of price increases since 2021.

Not surprisingly, the Delhi NCR led with a staggering 32% annual price growth. Bengaluru followed at 24% and the dark horse, Hyderabad, also saw notable gains.

Across the board, the common factors driving this surge include increasing construction costs and buyers’ preference for high-quality homes with amenities. It is reassuring to note that despite the upward prices, the market remains healthy with continued demand, and unsold inventory is steadily declining.

In the third consecutive quarterly decline, India’s top cities saw a drop of 8% year-on-year in unsold inventory. Q3 2023 had 6.10 lakh units which declines to 5.64 lakh units in Q3 2024. The Mumbai Metropolitan Region had the highest share of unsold inventory at 40%, while Hyderabad bucked the trend with a modest dip, despite an annual increase of 28%.

This trend indicates strong sales, particularly in mid-segment and luxury housing.

New Housing Supply Drops

New residential launches dipped below the 1,00,000-unit mark for the first time since early 2023, with approximately 93,750 units introduced in Q3 2024. This represents a 19% annual decline and a 20% quarterly drop.

Interestingly, while most cities saw a reduction in new launches, NCR and Chennai bucked the trend with remarkable increases of 53% and 51%, respectively. MMR led in new supply with about 29,600 units launched, followed by Bengaluru with 15,900 units.

The Outlook for 2025

We anticipate a strong finish in 2024 for the Indian residential real estate market – in large part due to the festive season, a traditionally auspicious time for buying a home. There are plenty of new project launches and attractive deals, including flexible payment plans and freebies, that will appeal to buyers’ hearts and wallets.

It may not be at the same breakneck speed as seen so far but the basics are remarkably robust and we expect 2025 to be a good year, as well. There are multiple factors which make us optimistic about the new year.

There is a push of migration towards Indian cities – if not Tier 1, definitely Tier 2 and 3 cities are booming. And this growing urban population continues to fuel housing demand, which is good news.

Government initiatives and policies aimed at promoting affordable housing and infrastructure development are being hammered into place, ensuring more people can buy homes.

Interest rates have been steady with a stable monetary policy for some time now – this means that buyers can finance their home purchases more easily.

Does that mean everything is great?

Nope. There are challenges such as geopolitical tensions and economic uncertainties that could affect the growth trajectory. But these are expected to be temporary, and we believe that the long-term outlook for the Indian residential real estate market is positive.

A Recap

Let’s just recap the salient points.

• Housing demand continues to stay strong. While there is a dip in Q3 2024 (easily attributed to seasonal factors), sales are outpacing new launches.
• Buyers shift toward premium homes. The overwhelming preference is for larger, high-end homes, and this trend is reflected in new launches too.
• Prices continue to shoot up. This is the 15th consecutive quarter of price increases, and it does not seem likely to change in the near future. The resilient market conditions combined with the demand for quality housing will ensure that this remains true, for some time at least.
• Unsold Inventory Declines: Healthy sales momentum has led to a drop in unsold units, but this is a good shift as it points to a more balanced market.

So, at the tail end of 2024, the Indian residential real estate market is at a pretty good place. The market is stable, with measured growth, and new launches prove that developers are adapting to shifting buyer preferences.

Looking ahead, we expect the market to remain buoyant, supported by strong economic fundamentals. While there are always challenges, the housing sector is poised for growth, making it an exciting time for industry stakeholders and homebuyers alike.

Save Max is the trusted partner for all your real estate needs. As a leading brokerage company in India, we offer a diverse portfolio of projects and properties across major cities, including Delhi, Gurgaon, Noida, Bangalore, Pune, Kolkata, and Chandigarh. Contact us and will guide you to finding the right property.