With Navratras setting a positive tone, festive realty is poised to make most of the pre-festive high demand and surge in home sales on the back of favourable consumer sentiment.
That promising times are ahead for the real estate developers is evident from the residential demand surpassing the pre-pandemic levels of Q3 2019 and new residential launches registering a YoY growth of 61 percent with the new supply coming at par with the 2015 levels for the second consequetive quarter.
According to Real Insight Residential Q3 2022, a quarterly report on residential market trends released by REA India-owned digital real estate transaction and advisory services platform PropTiger.com, on the back of strong demand, residential sales have continued to show robust growth while registering sales of 83,220 units, a 49% YoY growth between July-September 2022 as compared to 55,910 units sold in the corresponding period last year.
“The real estate industry is bouncing back from the pandemic and subsequent disruptions, and it’s evident from the data trends and insights. Especially, the just commenced festive season is experiencing a continuous surge in consumers’ positive sentiments towards property investments. The third quarter of this year has seen a significant improvement in the demand for housing and this will set the ball rolling for the next quarter as well, according to Vikas Wadhawan, Group CFO, PropTiger.com, Housing.com, and Makaan.com.
What is really encouraging is that despite the slight increase in overall interest rates, the demand for housing hasn’t dipped, largely due to renewed thrust towards home ownership. In fact, the demand for residential properties has surpassed the pre-pandemic levels of 2019’s Q3 (July – September). With the festive sentiments and varied discounts in play, consumers’ sentiment for property purchase will further go up.
Mumbai and Pune continue to top the charts with respect to traction, contributing to 53% of the total sales in Q3 2022 (July to September). A majority (27%) of the properties sold fell in the INR 45-75 lakh price range.
In view of the depleting ready-to-move-in inventory, close to 19% of the units sold were RTMI properties, while the remaining 81% were under construction or new launches. According to latest Consumer Sentiment Outlook (July-December 2022), 58% of the potential homebuyers are looking for RTMI properties.
Residential Realty Demand Scenario
| Sales | 2022 | 2021 | QoQ | YoY | |
| City | Qtr3 | Qtr2 | Qtr3 | ||
| Ahmedabad | 7,880 | 7,240 | 5,480 | 9% | 44% |
| Bangalore | 7,890 | 8,350 | 6,550 | -6% | 20% |
| Chennai | 4,420 | 3,220 | 4,670 | 37% | -5% |
| Delhi NCR | 5,430 | 4,520 | 4,460 | 20% | 22% |
| Hyderabad | 10,570 | 7,910 | 7,810 | 34% | 35% |
| Kolkata | 2,530 | 3,220 | 2,650 | -22% | -5% |
| Mumbai | 28,800 | 26,150 | 14,160 | 10% | 103% |
| Pune | 15,700 | 13,720 | 10,130 | 14% | 55% |
| India | 83,220 | 74,330 | 55,910 | 12% | 49% |
Source: Real Insight Residential – July-September 2022, PropTiger Research
Post the lull of the pandemic, the tide has now turned in favour of the residential property market. Demand continues on an upward trajectory with property sales registering a stunning double-digit YoY growth. The positive homebuyer and investment sentiment regarding residential realty, along with the festive season sentiment booster, has encouraged developers to launch new projects,, according to Ankita Sood, Head of Research, PropTiger.com, Housing.com & Makaan.com.
Overall, the trends signal for a positive outlook for residential realty in the coming quarters as demand will continue to strengthen on the back of levers such as festive discounts and flexible payment plans, underpinned by the renewed importance of home ownership.
PropTiger.com’s analysis shows double-digit growth for the new launches.With a total of 1,04,820 units launched in Q3 of 2022, the new launches were at par with average quarterly levels of 1,00,000 units in 2015 . Overall the new supply registered a YoY (Q3-2021 vs Q3-2022) growth of 61% compared to the same time last year, and on a QoQ basis ( Q2-2022 vs Q3-2022 ), it grew marginally by 3%.
In terms of the price bracket, a majority of the new supply in Q3 2022 was concentrated in the INR 1-3 Cr bracket, taking 32% of the share in the total new property launches, closely followed by INR 45-75 lakh price range, which took 31% of the share.
New Launches Update
| Launches | 2022 | 2021 | QoQ | YoY | |
| City | Qtr3 | Qtr2 | Qtr3 | ||
| Ahmedabad | 8,190 | 9,500 | 13,440 | -14% | -39% |
| Bangalore | 14,610 | 12,730 | 3,070 | 15% | 376% |
| Chennai | 3,920 | 1,830 | 2,330 | 114% | 68% |
| Delhi NCR | 6,340 | 2,970 | 1,750 | 114% | 263% |
| Hyderabad | 27,440 | 16,480 | 12,340 | 66% | 122% |
| Kolkata | 2,410 | 2,010 | 440 | 20% | 446% |
| Mumbai | 28,880 | 43,220 | 21,820 | -33% | 32% |
| Pune | 13,030 | 13,390 | 10,020 | -3% | 30% |
| India | 1,04,820 | 1,02,130 | 65,210 | 3% | 61% |
Source: Real Insight Residential – July-September 2022, PropTiger Research
Weighted average prices for new supply and inventory across top eight cities have appreciated by 3-9% YoY in Q3 2022. The surge in inflation, hike in input costs and premium charged over ready-to-move-in properties continue to put upward pressure on property prices across major cities.
Property Prices Outlook
| City | Average price Q3 2022 (in Rs per square foot) | Annual growth in % |
| Ahmedabad | 3,600-3,800 | 6% |
| Bangalore | 5,900-6,100 | 9% |
| Chennai | 5,500-5,700 | 3% |
| Delhi NCR | 4,700-4,900 | 6% |
| Hyderabad | 6,100-6,300 | 5% |
| Kolkata | 4,400-4,600 | 7% |
| Mumbai | 9,900-10,100 | 3% |
| Pune | 5,500-5,700 | 8% |
| Pan India | 6,600 – 6,800 | 6% |
Source: Real Insight Residential – July-September 2022, PropTiger Research
There has been a significant decline in the inventory overhang i.e the estimated period builders in a particular market are likely to take to sell off their unsold stock at the existing sales velocity . It dipped to 32 months during Q3-2022 (July – September) from last year’s 44 months in Q3-2021. This comes on the back of sustained sales momentum as the sector steadily recovers from the pandemic’s impact. Kolkata had the lowest inventory overhang in Q3 2022 (24 months), while Delhi NCR had the highest (62 months).The overall unsold inventory in Q3 2022 stood at 7.85 lakh units, with nearly 21% of the unsold inventory in the top 8 cities falling in ready-to-move-in category.
| Unsold Inventory as of September’22 | ||
| City | Unsold stock as of September’22 | Inventory Overhang (months) |
| Ahmedabad | 65,160 | 30 |
| Bangalore | 77,260 | 28 |
| Chennai | 32,180 | 27 |
| Delhi NCR | 1,00,770 | 62 |
| Hyderabad | 99,090 | 41 |
| Kolkata | 22,530 | 24 |
| Mumbai | 2,72,960 | 33 |
| Pune | 1,15,310 | 22 |
| India | 7,85,260 | 32 |
Source: Real Insight Residential – July-September 2022, PropTiger Research
Note – The Top 8 cities in PropTiger.com’s analysis include Ahmedabad, Delhi NCR (Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, and Faridabad), Chennai, Bengaluru, Hyderabad, Kolkata, Mumbai MMR (Boisar, Dombivli, Mumbai, Mazagaon, Panvel, Thane West), and Pune.
With these distinct positive trends , the festive season is expected to boost residential real estate.
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