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Residential Market Robust Despite Blip in Supply & Absorption

Torbit - June 23, 2024 - - 0 |

The residential market in top cities has seen a dip in both new launches and absorption . However, bucking the trend, Delhi-NCR has seen both supply and absorption rising both YoY and QoQ.

Both new launches and absorptions have registered a decline in April-June quarter (Q2 2024) across nine key residential real estate markets in the country. As per an analysis by PropEquity (P.E. Analytics Ltd.), the new launches during Q2 2024 across Bangalore, Chennai, Hyderabad, Kolkata, Thane, Mumbai, Navi Mumbai, Pune and Delhi-NCR stood at 97331 units , a decline of 13 percent as compared to 1,11657 units launched in April-June 2023.

On a Q-O-Q basis, the cumulative new Supply in these cities witnessed 7 percent decline with 97,331 units launched in Q2 2024 as compared to 1,04,391 units in Q1 2024.

With Q2 2024 being an election quarter, the developers were holding back their launches during that time and it is one of the reasons for a drop in new launches.

New Launches (in units) in Q2 2024

New Launches (in units) in Q2 2024


 In Q2 2024, absorption sales of 119901 units saw a decline of 18 percent compared to previous quarter which stood at 1461947 units However on a Y-o-Y basis the absorption/Sales witnessed a marginal decline of only 2 percentdown to 1,19,901 units compared to 1,21,856 units absorbed/Sold in Q2 2023.

Total Absorption or Sales (in units) in Q2 2024              

  

  • Q1 2024 was an extraordinary quarter with the highest absorption /sales of 146147 units  ever witnessed.  Q2 is usually the slowest quarter compared to other quarters with respect to supply and absorption/sales.
  • The absorption/sales been higher by 20 percent compared to new supply signifies that the upswing and good health of the residential real estate market post covid is continuing.
  • NCR – Delhi is the only city that witnessed increase in new supply and absorption/Sales on Q-o-Q basis with 2 percent and 7 percent respectively. Chennai and Navi Mumbai were the only other 2 cities which witnessed an increase in new supply on Q-o-Q basis by 10 percent and 17 percent.

“The marginal drop of new launch supply in top tier 1 cities is just 8 percent which is primarily due to election quarter & Q2 being slightly sluggish as compared to other quarters of the year. However the 20 percent higher absorption/sales as compared to new supply signifies upswing and good health in residential real estate continues and the market continues to be robust post covid”, says Samir Jasuja, CEO & MD PropEquity.

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