Demand for bigger homes and costly raw material drive house prices up
A rise in raw material costs and demand for larger homes impact housing sales, but industry leaders remain optimistic about post-Budget recovery in the affordable housing sector
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Mumbai: The demand for bigger homes and rise in raw material prices have driven up the prices, which has caused fall in housing sales by 9 per cent in the year gone by.
However, with the likelihood for push for affordable houses in the forthcoming Budget will help increase the sales post Budget, hope industry experts.
Talking to Bizz Buzz, Garvit Tiwari, Director & Co-Founder, InfraMantra says, “The decline in housing sales and rise in property prices is a phenomenon that has been seenacross top cities in 2024 owing to high base effect.”
The demand for bigger homes and rise in raw material prices have driven up the prices. The enquiries suggest that housing demand exists and we hope acceleration in sales happens post budget where affordable housing push is expected, he said.
Housing sales fall 9 per cent, new supply declines 15 per cent in top 9 cities in 2024 reveals a report byPropEquity.
Vijay Harsh Jha, Founder and CEO, VS Realtors says, “The slowdown is also being felt by the housing sector. Investors and homebuyers have taken a cautious approach. The sharp rise in prices have also left out a large section of people wanting to buy a house.”
For the sales to be broad-based, more mid-income and affordable housing supply have to be created, he added.
The residential real estate market in India’s top 9 cities saw a marginal 9 per cent decline in sales at 4,70,899 units while new supply fell by 15 per cent to 4,11,022 units in 2024 on the back of two quarters of under-activity due to General Elections and Monsoon, the report added.
The number of units sold in 2023 stood at 5,14,820 units while the number of units launched in 2023 stood at 4,81,724 units.
Housing sales rose in only two out of the nine cities in 2024 with Navi Mumbai recording the highest growth while Hyderabad recording the highest decline.
New supply rose in four out of nine cities with Delhi-NCR recording the highest growth and Hyderabad recording the highest decline. Samir Jasuja, CEO & Founder, PropEquity said, “The drop in housing supply and sales in 2024 is due to the high base effect, as 2023 was a peak year.”
A detailed analysis of the numbers reveals that despite the drop, the supply to absorption ratio in 2024 remains the same as 2023 which indicates that the fundamentals of the real estate sector are strong and healthy.
