The year 2023 has started with a promising note for residential realty that saw a record recovery despite a surge in home loan rates and increase in property prices. Going forward, the high home sales registered last year hold promise for residential realty in 2023.
The year 2022 has laid a strong foundation for residential real estate to take off this year with good growth prospects. It was a fantastic year for residential real estate. Latest Anarock research indicates that housing sales in the top 7 cities have created a new peak in 2022, breaching the previous high of 2014. Approximately 3,64,900 units were sold in 2022 against 2,36,500 units in 2021 – registering a 54% Y-o-Y rise. The last peak was seen in 2014 when 3.43 lakh units were sold across the top 7 cities.
In terms of cities, MMR witnessed the highest sales of approx. 1,09,700 units in 2022, followed by NCR with nearly. 63,700 units. The two realty hotspots have once again emerged as the leading residential markets.
Meanwhile, new launches across the top 7 cities saw 51% annual increase , up from 2,36,700 units in 2021 to nearly 3,57,600 new units in 2022. MMR and Hyderabad witnessed maximum new launches in 2022, together comprising nearly 54% share of the total new launches in the year.
According to Anuj Puri, Chairman, Anarock Group, 2022 was a phenomenal year for residential real estate despite all headwinds including rising property prices, interest rate hikes and all geopolitical tensions etc. Housing sales in top 7 cities breached the previous highs of 2014 while new launches in comparison remained restricted.While it was widely anticipated that the rise in property costs and interest rates towards the second half of 2022 would have a cascading impact on the residential sales, Q4 2022 remained quite robust with as many as 92,160 units sold in the period, Interestingly, NCR became the shining star in 2022 which strategically restricted new supply in the year to about. 22,350 units but witnessed robust housing sales of 63,700 units.”
Further, as we march into new year, the current sales momentum in the housing sector is expected to continue in the first quarter of 2023. The appetite for homeownership has remained undeterred, with maximum sales being driven by the end-users. However, various risks loom large around the residential segment. A lot will depend on how the home loan interest rates pan out over the next year.”
Puri goes on to state that in 2023, we may see new launches to remain well under control across most top cities. Ready-to-move-in will continue to top buyer demand but the demand for new launches will also gain momentum. This is largely because the new supply in the market is and will continue to be dominated by the large and listed developers in the new year. There is a sense of confidence among the buyers for these developers and hence they will continue to perform well and see significant sales, just as they did in 2022.
Housing Sales Overview City-wise
Residential sales stood at approx. 3,64,900 units in 2022 against 2,36,500 units in 2021, rising yearly by 54%. NCR, MMR, Bengaluru, Pune, and Hyderabad together accounted for 90% of the sales in the quarter.
| City-wise Absorption (In Units) | |||
| City | 2022 | 2021 | %Change (2021 Vs 2022) |
| NCR | 63,712 | 40,053 | 59% |
| MMR | 1,09,733 | 76,396 | 44% |
| Bengaluru | 49,478 | 33,084 | 50% |
| Pune | 57,146 | 35,975 | 59% |
| Hyderabad | 47,487 | 25,406 | 87% |
| Chennai | 16,097 | 12,525 | 29% |
| Kolkata | 21,220 | 13,077 | 62% |
| Total | 3,64,873 | 2,36,516 | 54% |
Source: ANAROCK Research
New Launches Overview City-wise
The top 7 cities recorded new launches of around 3,57,600 units in 2022 as opposed to 2,36,700 units in 2021, an annual increase of 51% over the previous year. Key cities contributing to 2022 new unit launches included MMR, Hyderabad, Pune, and Bengaluru, altogether accounting for 86% of the total addition.
| City-wise New Supply (In Units) | |||
| Cities Name | 2022 | 2021 | %Change (2021 Vs 2022) |
| NCR | 25,355 | 31,706 | -20% |
| MMR | 1,24,652 | 56,883 | 119% |
| Bangalore | 49,196 | 30,646 | 61% |
| Pune | 64,343 | 39,869 | 61% |
| Hyderabad | 68,007 | 51,470 | 32% |
| Chennai | 9,994 | 12,373 | -19% |
| Kolkata | 16,088 | 13,746 | 17% |
| Total | 3,57,635 | 2,36,693 | 51% |
Price Movements
On annual basis, prices rose in the range of 4 – 7%, primarily due to an increase in the input costs and demand comeback post-COVID.
| City-level price trends (INR/sq. ft.) – BSP on BUA | |||
| City | Q4-2022 | Q4-2021 | %Change (Q4-2021 Vs Q4-2022) |
| NCR | 5,025 | 4,781 | 5% |
| MMR | 11,890 | 11,092 | 7% |
| Bengaluru | 5,570 | 5,217 | 7% |
| Pune | 6,000 | 5,733 | 5% |
| Hyderabad | 4,620 | 4,372 | 6% |
| Chennai | 5,315 | 5,070 | 5% |
| Kolkata | 4,700 | 4,512 | 4% |
Source: ANAROCK Research
Available inventory as of Q4 2022-end
On annual basis, available inventory declined by 1% in Q4 2022 despite strong new housing supply in 2022. As many as 6,30,953 units are available for sale across the top 7 cities in India.
Now, as we march into 2023, the ongoing sales momentum in the housing sector is expected to continue in the first quarter of the new year. The appetite for home ownership remains undeterred with maximum sales driven by end users. We may see new launches to remain well under control across most top cities. Ready-to-move -in homes will continue to top buyers’ demand but the demand for new launches will also gain momentum. This is largely because the new supply in the market will continue to be dominated by the large and listed developers . As there is a sense of confidence among the buyers, the sales by these developers will be significant.
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