India experienced an unprecedented surge in housing sales during the third quarter of 2023, reaching an all-time high, as reported by real estate consultancy firm ANAROCK. Despite the traditionally sluggish monsoon season, the country’s top seven cities witnessed this remarkable growth, partially attributed to the central bank’s decision to maintain the repo rate.
Home sales in these metropolitan areas soared to 120,280 units during the July to September period, a substantial increase compared to the 88,230 units sold in the same months in 2022, representing a remarkable 36 percent increase. According to ANAROCK, average housing prices in these cities also showed significant growth, increasing by 11 percent annually during the same period.
Among these cities, the Mumbai Metropolitan Region (MMR) led the way with the highest number of sales, totaling approximately 38,500 units. Pune closely followed with nearly 22,885 units sold. Together, these western cities accounted for 51 percent of the total sales in Q3 2023. MMR experienced a 46 percent annual rise in housing sales, while Pune witnessed an even more impressive 63 percent yearly increase.
Regarding new property supply, the top seven cities saw a surge of over 1.16 lakh units, marking a 24 percent annual growth. MMR remained at the forefront of this category with around 36,250 units launched in Q3 2023, albeit with a modest 1 percent annual growth rate. Hyderabad, on the other hand, experienced a remarkable 60 percent yearly surge, adding approximately 24,900 units during the same period.
The market also observed an increased supply of luxury units, priced above INR 1.5 Crores, which accounted for 27 percent of the total share, marking the highest quarterly share in the last five years. Despite the rise in new supply, the existing housing inventory across the top seven cities decreased by 3 percent annually, dropping from approximately 6.30 lakh units in Q3 2022 to around 6.10 lakh units in Q3 2023.
Collectively, average residential prices in the top seven cities saw an 11 percent growth in Q3 2023 compared to the same quarter in the previous year. Hyderabad led this growth with an impressive 18 percent yearly increase, closely followed by Bengaluru, which experienced a 14 percent rise.
ANAROCK attributed this continuous upward momentum in housing sales at least in part to the Reserve Bank of India’s decision to maintain a stable repo rate in recent monetary policies. This policy stability has kept the home loan interest rates of all banks steady and boosted confidence among potential homebuyers.
ANAROCK Chairman Anuj Puri expressed optimism, stating that the robust performance of the housing market is expected to continue into the October-December quarter. Puri highlighted the influence of the repo rate pause in driving this positive trend, and he anticipated record sales, especially in projects by established developers, as they have strong pipelines for new project launches during the upcoming festive season.
Mohit Jain, Managing Director of Gurugram-based realty firm Krisumi Corporation, noted that the demand for housing remains strong, driven by rising income levels and the aspiration of homeownership. This trend is expected to persist in the foreseeable future, including a continued demand for luxury housing, as people seek upscale living experiences.
In conclusion, the Indian housing market has experienced exceptional growth in sales and prices, driven by various factors, including the stable repo rate and strong demand, with expectations of continued momentum in the coming months.
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