Spurt In Homebuyers Sees Realtors Getting Hyper-Energetic

Homebuyers' sentiments across the country appear positive and bullish. More importantly, a large number of aspirational homebuyers are coming to the fore. Little wonder that realty players have lapped up the situation and are going all the way to cash in on this sentiment. This is reflected by the fact that average housing prices across the top eight markets in India rose 11 per cent YoY at Rs. 11,000 per sq.ft., during Q3 2024, thereby leading to a sturdy demand and positive market sentiments. Interestingly, average housing prices have increased for the 15th consecutive quarter since 2021.

All the eight major cities saw an annual increase in housing prices with Delhi NCR witnessing the highest rise at 32 per cent YoY, followed by Bengaluru at 24 per cent. After registering record high sales over the last two years, the demand momentum across the top cities is gradually stabilising. Nevertheless, with the anticipation of healthy residential activity in the last quarter, 2024 is likely to end on a strong note. Coupled with this, the overall unsold inventory continued to witness a quarterly drop for the third consecutive quarter, led by healthy uptake in housing units. At the end of September, unsold inventory stood at over 10 lakh housing units across the eight major cities, with MMR accounting for a majority at about 40 per cent share.

Significantly, unsold units in Hyderabad saw a modest dip on a sequential basis despite a yearly increase of about 28 per cent. Developers across the country are of the view that the ongoing rise in housing prices is another validation of positive homebuyer sentiments and the highly conducive nature of the real estate market. One can also notice the emergence of more and more aspirational homebuyers, thereby resulting in bigger homes that are also being reflected in the rise in prices as homes continue to get more expansive, truly reflecting the current market dynamics and consumer preferences. Experts expect this robust momentum to continue going into 2025 and are hopeful of rate cuts in the future. Meanwhile, supported by strong underlying market fundamentals, the outlook for the residential segment remains positive. As a result, developers are recalibrating their strategies, particularly in the price-sensitive segments, by offering compact size units.

Although average housing prices have continued to increase steadily, witnessing an 11 per cent YoY growth during Q3 2024, the likely easing of monetary policy and anticipated repo rate cuts can potentially bring financial relief to homebuyers in the near term. Moreover, flexible payment plans and freebies to attract buyers will boost the residential sales momentum. The fact that sales and prices are continuing to grow suggest that affordability and demand are intact. The luxury segment is still dominant, although the realty market has been seeing a gradual decline in new launches.

However, one has to keep in mind that with the existing high unsold inventory levels to the tune of 10 lakh units across the eight major cities, developers are being cautious with new launches. They are realigning their strategies by assessing and identifying the appropriate target audience in high demand pockets.