Housing sales dip 11% in third quarter of CY24 in top 7 cities: Report

Market stabilising and 'demand-supply equation robust', says property consulting company ANAROCK

Housing sales in the top seven Indian cities in the third quarter of calendar year 2024 (Q3 2024) dipped 11 per cent on yearly basis, owing to factors like high prices and monsoon, a recent report said on Thursday, while noting that the market was stabilising.

Data provided by ANAROCK, a property consulting company, showed that sales declined from more than 120,000 units in Q3 2023 to about 107,000 during the same period this year.

ANAROCK attributed the decline to high prices and monsoon. “...the ‘shraad’ period also suppressed demand to an extent as many Indians defer home buying during this period. Overall, the housing market is stabilising after creating a new peak in Q1 2024,” it said.

 

The top seven cities are Mumbai Metropolitan Region (MMR), Delhi National Capital Region (NCR), Hyderabad, Bengaluru, Chennai, Kolkata, and Pune.

As many as 93,750 houses were launched in Q3 2024 compared to 116,220 units the same time last year, marking a 19 per cent annual drop.

Further, according to ANAROCK, besides rising input costs and the high base in sales considered in Q1 2024, the fact is that housing prices have risen significantly in the last one to two years. Many buyers have again gone into a wait-and-watch mode.

Average residential prices across the top seven cities have seen 23 per cent yearly growth in Q3 2024 as against Q3 2023. Further, if we compare data trends in the last two years, then average prices have risen by 37 per cent between Q3 2022 and Q3 2024. This has put pressure on many buyers as affordability has gone down.

Luxury houses, those priced more than Rs 1.5 crore, comprised 33 per cent, the highest of new launches. Affordable housing's share was about 13 per cent, the lowest.

The decline in sales is also partly because investors, who had been closing deals in the last few years, are now taking a breather as prices have reached their peak. Together, these factors have contributed to tapered sales in the third quarter.

City-wise, Kolkata reported the highest year-on-year (Y-o-Y) decline of 25 per cent in absorption of units. In terms of supply, Pune witnessed a staggering decline of 49 per cent.

However, Anuj Puri, chairman of ANAROCK Group, stated, “The fact that sales remained higher than launches indicates that the demand-supply equation remains robust.”

On the other hand, the top six Indian cities witnessed a 31 per cent Y-o-Y increase in Grade A office space demand amid leasing of 17.3 million square feet (msf) of space during the same period, as per a research by Colliers. Meanwhile, the supply too increased by 33 per cent to 14.4 msf.

The top six cities are Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune.

Overall, in 2024 year to date (YTD), the cities absorbed 46.7 msf of office space, 23 per cent more in comparison with the same period during 2023.

Arpit Mehrotra, managing director, office services, India, Colliers, said, “Bengaluru saw 81 per cent of its leasing through large-sized deals, while Pune followed closely with 71 per cent, driven by the tech and BFSI sectors.”

As per the research, the technology sector drove around one-fourth of the overall office space demand during the quarter, followed by banking, financial services, and insurance (BFSI) occupiers and flex space operators.