NEW DELHI: Housing sales in India’s top seven cities--Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Kolkata, and Pune--in 2022 hit 215,000 units, a decadal high, real estate consultancy JLL said in a report released on Thursday. In 2010, sales were at 216,762 units.
According to the report, sales across the said cities in 2022 were up 68% year-on-year, with more than 50,000 units sold in each of the four quarters of 2022. High sales numbers are significant given the rise in mortgage rates, property prices, and global headwinds during the year.
Bengaluru, Hyderabad, Mumbai, and Pune achieved the highest sales since 2008, while Delhi NCR and Kolkata recorded the highest sales since 2014.
“Quarterly sales numbers (October-December) improved by 16% in Q4 2022 as compared to Q4 2021. However, sequentially it was down by 5% as there was a cautious approach and delayed decision-making observed in the last month of the year by prospective home buyers due to the global headwinds and uncertainty in the economic conditions. It is important to note that in the second half of the year (H2 2022), sales accounted for 51% share of the overall sales in 2022," JLL said.
“The high sales volumes in the second half of 2022 show that sales were still robust despite the recent challenges underlining the strength of the residential market in India and the increasing importance of home ownership post-pandemic. The Indian residential market is expected to sustain its growth momentum in 2023 while dealing with the challenges of global headwinds and higher interest rates," said Siva Krishnan, managing director and head, Residential Services, India, JLL.
Bengaluru and Mumbai jointly led quarterly sales with a 21% share, followed by Pune with an 18% share. Interestingly Pune, Hyderabad, and Delhi-NCR exhibited increased sales volume in the second half of the year driven by quality launches in prime as well as emerging growth corridors.
Residential sales were robust across all price segments, including the affordable, mid, and premium segment. Almost half of the sales witnessed in 2022 came from apartments priced at up to ₹75 lakh.
The premium segment, with units priced at ₹1.5 crore and above, had a share of 19% in overall sales recorded in 2022.
Share of apartments priced below ₹50 lakh in total annual sales declined from 28% in 2021 to 22% in 2022. On the other hand, the share of the premium properties rose to 19% from 10%.
The affordability synergy that prevailed six months back, however, has been facing some challenges. There has been a rise in residential prices across the top seven cities of India in the range of 4-11% from a year ago along with the home loan interest rate that has moved up by around 200 bps in the last 7-8 months. The increase in prices is seen across the spectrum of projects that have high demand and less ready-to-move inventory. New phases of existing projects are also getting launched at higher prices.
“While affordability is likely to be dented, job stability and economic growth will continue to provide the necessary impetus to home buying activity. Also, it is expected that measures will be taken by various stakeholders to combat inflationary pressures. As the developers are taking cognizance of the buyers’ preferences and focusing on developing or launching projects that are more relevant and aligned with the evolving customer requirements, the residential market is expected to carry forward the growth momentum witnessed in the past year" said Samantak Das, chief economist and head Research & REIS, India, JLL.
Residential launches in 2022 at 247,000 units, were up 81% on year, and were the highest in over a decade and next to the previous high of 281,000 units in 2010. Encouraged by robust sales and strong economic fundamentals, developers launched residential projects across the top seven cities of India.
“India’s residential market has been on an unprecedented upcycle in 2022 with affordable synergies and the growing importance of home ownership. We have now entered the territory of rising interest rates and global headwinds. As a result, affordability is likely to be impacted further in 2023. Price pressures and moderate-income growth are further likely to create a temporary glitch for affordability, though it should remain attractive and second only to the highest affordability levels seen in 2021," JLL said.