Both in terms of sales and new launches, the top cities have outshined tier 2 cities by a huge margin. Top 20 percent of the cities launched 80 percent of the new supply in CY 22.
According to a report by PropEquity ,the sales of residential property in tier-1 cities in the country stood at more than 250% of the levels seen among tier 2 cities in the calendar year 2022. The total absorption witnessed in Tier1 cities was a whopping 4.53 lakh units as against 1.83 lakh units in tier 2 cities.
Even in terms of new launches of residential property, the tier 1 cities outperformed the tier 2 cities by more than 240% in 2022. The new launches seen in metros stood at 3.71 lakh unit mark while it was 1.52 lakh units in the latter.
A similar trend was observed in the new launches share of the top 44 cities (Tier-1 & Tier-2), tracked by PropEquity. In CY’22 the market share of top 9 cities (20% of 44 cities) witnessed about 80% of new supply.
This disproportion in metros and tier 2 cities is due to better employment opportunities, improved infrastructure with superior standard of living in tier 1 cities. Regardless of size of the real estate industry in the two categories of cities, there are very positive developments and all round growth of property market across the country where more and more people are finding a home of their choice and within their budgets. These are healthy signs of a matured real estate, according to Samir Jasuja , Founder & Managing Director at PropEquity.
Interestingly, CY 2022 has witnessed the highest launches and absorption in the last eight years, with absorption crossing 4.5 lakhs of residential units with only 3.7 lakhs new supply in the same period. Inventory overhang i at all-time low with only 12 months of inventory left in top tier1 cities in India. This gap in inventory will encourage developers to launch new projects in the coming quarters to cater to the existing demand.
In all, 2022 has witnessed maximum residential property sales in the last eight years, with total absorption increasing by 28% year-on-year. These higher sales were a result of multiple factors such as increased confidence of consumers on hard assets compared to volatile assets post-COVID and lower repo rates of 4% in the first half of 2022, increasing the borrowing and lending capacity of commercial lenders because of lowered cost of credit and the increase of liquidity in the financial system.
Premium Homes Driving Housing Demand
New premium homes and apartments costing Rs 1-2 crore are the most sought after residential units with Thane West in Mumbai, Whitefield in Bengaluru and Greater Noida West in Delhi-NCR emerging among the top three location choices of home buyers. Online property searches for renting homes grew by 1.5 times in 2022, with Bengaluru, Mumbai, and Hyderabad taking the Lead
These are the fiindings of Housing.com , a leading platform for property search .
In its latest report, Housing.Com has analysed visitors’ activities on its platform during the 2022 calendar year. As per the research findings, New Town in Kolkata and Mira Road East in Mumbai were at 4th and 5th position, respectively, in terms of search for residential properties on the property platform Chandkheda in Ahmedabad was at 6th position, followed by Wakad in Pune, Kharghar in Pune, Gota in Ahmedabad and Vastral in Ahmedabad.
For the period from January to December 2022, the following top 10 trending localities where identified for high intent and high-volume organic searches for buying a home .
Top 10 Locations for New Homes Search
According to Dhruv Agarwala, Group CEO, Housing.Com, Prop Tiger.Com, and Makaan.Com, based on the trends highlighted in our latest report, the demand for housing is likely to remain strong in the top micro-markets, and the growing interest
in new apartments and properties priced between Rs. 1 crore to 2 crores is being seen . “Besides, We also see a lot of potential in tier 2 cities, where online property searches for apartments are growing at a faster pace than for independent homes. This presents a significant opportunity for developers and real estate agents to cater to the needs of home buyers in these cities.”
Considering that the sales of residential properties continue to be robust even during this quarter despite the hike in interest rates over the past year. the future of the Indian residential real estate market looks bullish and the industry will continue to see growth in the coming years, driven by factors such as urbanization, rising disposable incomes, and favorable government policies, according to Agarwala
Ms. Ankita Sood, Head of Research, Housing.Com, PropTiger.Com and Makaan.Com opines that we are definitely in the up-cycle for residential realty demand owing to the pandemic-induced shift towards higher homeownership. Fuelled by both end-user and investor interest, the property markets have shown resilience where buyers are carefully filtering out projects and looking for the right product mix in terms of affordability, accessibility and quality of living. With new supply surpassing pre-RERA levels in 2022, there are a plethora of new projects offering more choice to buyers. Ms. Sood expects this up-cycle continuing in 2023, with quality living and lifestyle upgradation as key parameters defining property purchase.
Housing. Com also observed that of total searches on its platform (website and mobile app), 60 per cent customers were looking to buy residential properties while the remaining 40 per cent wanted to take property on rent. For buying, the sweet spot was for apartments below Rs 50 lakh, as maximum searches were seen in this price bracket. However, the research also showed that searches for residential properties priced between Rs 1-2 crores grew 24 per cent annually in 2022. Moreover, homebuyers searched for new apartments with queries rising by 52 per cent in 2022 over the previous year. Queries for resale properties registered a 2% YoY drop in 2022. Online searches for properties with a 3BHK and above configuration grew 1.4 times in 2022.
The data also showed that online property search volume for renting homes grew 1.5 times in 2022. Bengaluru, Mumbai, and Hyderabad took the lion’s share in searches and queries for renting a home in 2022.
In tier 2 cities, Lucknow emerged as the top city for buying a home, followed by Jaipur and Indore. Online property searches for apartments grew at a pace of 23% YoY, as compared to 8% YoY for independent homes in 2022. Overall, as per the report, the housing demand in these micro markets will remain strong in 2023.