At 149 million square feet (msf), the reported sales in Q3 FY2023 in the top seven cities in India is the highest quarterly sales recorded in over ten years. The area sold in 9M FY2023 increased to 412 msf against 307 msf in the corresponding period previous year, supported by continued end-user demand and good affordability. Post pandemic, there has been a gradual shift in the overall segment-wise composition with rise in the share of the luxury and mid segments to the overall sales across the top seven cities. The share of the luxury and mid segments to the overall sales has increased from 14% and 36%, respectively, in FY2020 to 16% and 42%, respectively, in 9M FY2023. A similar trend was observed in terms of launches as well.
Anupama Reddy, VP and co-group head, corporate ratings, ICRA, said: “The value of the area sold in the residential real estate sector is expected to grow by 8-12% in FY2023 and a further 14-16% in FY2024[2]. The shift towards larger spaces/ upgrade and preference for home ownership is expected to continue, thereby supporting the demand in the mid and luxury segments. Notwithstanding the rate hikes by the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) during the current fiscal, the home loan interest rates are still lower than the peak pre-covid interest rates and the affordability continues to remain healthy. While low inventory overhang and calibrated launches work in favour of developers, the impact of a growth slowdown on the job market and increase in interest rates on affordability pose risks.”
