Residential Property Sales increased by over 20% in Bengaluru, Mumbai and NCR trail in Q1

Residential prices, especially in the Indian metros, are on the rise despite home loan rates being high. Pricing of properties has been robust with an average realisation of Rs 7,200/sq ft, a rise of 11% when compared to the same period a year ago. This is because the demand has remained steady in the first quarter with pre-sales rising 19% when compared annually, as per report. It is noteworthy here that the demand has fallen sequentially by 7% but on expected lines as the fourth quarter is seasonally the strongest for the sector.

When it came to the metros, Bengaluru led the sales growth in the first quarter by registering over 20% growth annually and managing a 1% growth sequentially as well. This was followed by the National Capital Region (NCR) and the Mumbai Metropolitan Region (MMR). As expected by the market, launch activity slowed a tad, with all-India

reading falling 3% YoY and 11% QoQ. Bengaluru was again the leader in this. This has in turn resulted in the outstanding inventory across the country reducing to 1.3 bn sq. ft (down 6% YoY and 2% QoQ) as of June 2023.

A recent report, CREDAI and Liases Foras had also stated that residential property rates in the leading eight urban centres of India surged by as much as 7% year-on-year (Y-o-Y) in this period. Moreover, sector watchers expect that the upcoming festive season will help in further boosting the sales and sustain the momentum through the start of 2024. The real estate sector saw a mixed performance by listed players with Lodha and Prestige leading the way. The Kotak report states that Lodha, Prestige and Sobha delivered strong growth, while Oberoi and Godrej were weak in the first quarter.

Lodha at Rs 33.5 bn (up 18% yoy and 11% qoq), Prestige at Rs 39 bn (up 30% yoy and 1% qoq) and Sobha at Rs 14.6 bn (up 28% yoy, flat qoq) saw strong pre-sales. Meanwhile, Oberoi at Rs 4.7 bn (down 37% yoy and 29% qoq) and Godrej at Rs 22.5 bn (down 11% yoy and 44% qoq) saw a weak performance in 1QFY24. “We remain constructive on the sector, though the recent stock rally limits upside, making us more selective,” read the report.