Fuelled by high demand, QTS level in India at a historic low: Knight Frank

The demand for luxury homes continues to drive the Indian residential market, but the affordable segment is shaky

The quarter-to-sell (QTS) level—the number of quarters required by the market to exhaust existing inventory levels at current sales velocity—in Indian real estate is at a historic low, data released by real estate consultancy Knight Frank on Monday showed.

It revealed that in the first six months of 2024, the QTS level in India was 5.9 quarters (less than 18 months). This was lower than 6.2 quarters and 9.5 quarters in the same period in 2023 and 2021, respectively.

A lower QTS level denotes high sales traction and better market health.

The lowest QTS level was noted in the mid-segment homes—with a ticket size of Rs 50 lakh to Rs 1 crore—at 4.9 quarters. Last year, it was 5.2 quarters.

 

This segment was followed by luxury homes—priced above Rs 1 crore—with a QTS level of 5.1 quarters, down from 5.6 quarters earlier. Notably, the affordable segment—priced below Rs 50 lakh—has seen a rise in the QTS level to 8 quarters from 7.6 quarters earlier, depicting low demand.

The QTS has reduced in the first six months despite a 27 per cent year-on-year increase in unsold inventory in the Indian real estate market.

For the luxury segment, the QTS has continued to reduce despite a high number of new projects. This segment has been witnessing high traction in the last few quarters.

In the recent quarterly results, most top developers reported a jump in income and booking projections due to the demand for luxury homes.

DLF reported a threefold jump in sales bookings to Rs 6,404 crore compared to Rs 2,040 crore last year. Its sales were driven by its luxury project "DLF Privana West" at Sector 76/77, Gurugram, which saw sales of Rs 5,600 crore.

Another developer, M3M, said it was expecting revenue of around Rs 4,000 crore from its new luxury housing project, "M3M Altitude," in Gurugram. Each home in the project is priced between Rs 10 and Rs 30 crore.

Mumbai-based Oberoi Realty, which reported an 82 per cent rise in its net profit, said it was primarily driven by pricier homes.

"We are pleased to announce another successful quarter, driven by healthy demand in the luxury real estate market, with homeowners constantly looking to elevate their lifestyles," said Vikas Oberoi, chairman and managing director, Oberoi Realty.