Premium segment pie in home sales rises to 30%
Residential sales grew most in Hyderabad at 5% YoY, while Mumbai and Bengaluru saw a fall of 8% and 2% YoY respectivelyin H1 2023; Pune, Bengaluru saw double-digit growth in new launches
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Hyderabad The share of sales of homes costing Rs1 crore and above across eight cities in India grew to 30 per cent in January-June period (H1) 2023 from 25 per cent of sales in H1 2022, says a report. This can be attributed to the rising prices and the homebuyers’ need to upgrade to larger living spaces with better amenities, said property consultant Knight Frank India in its latest report.
As per the report, the residential sector has recorded a marginal decline of 1 per cent YoY in sales at 1.56 lakh units in H1 2023 but 1.7 per cent higher compared to H2 2022. While low-interest rates and comparatively low residential prices sparked the revival in demand, the residential sales level sustained even as interest rates rose. The new launches rise 8 per cent YoY at 1.73 lakh units.
The H1 period saw a growth for the premium residential segment, as it witnessed a rise across cities in H1 2023. The demand for mid-segment homes eclipsed the affordable segment in H1. While the market is carrying more inventory, the consistently high sales volumes in H1 2023 have pushed down the quarters to sell (QTS) level from 7.8 to 6.7 quarters during this period.
The biggest development was the share of homes in the mid-segment category of Rs 50 lakh-1 crore eclipsing that of the affordable home segment costing below Rs 50 lakh. The percentage of sales in the mid-segment category grew to 38 per cent in H1 2023 from 35 per cent in H1 2022, and the affordable segment - homes saw a dip of 32 per cent in H1 2023 from 40 per cent in H1 2022.
The market is evenly balanced between the three segments with the share of sales now ranging between 30-38 per cent. Prices increased across all markets in the range of 2-10 per cent YoY. Mumbai, Bengaluru and NCR registered 6 per cent, 5 per cent and 5 per cent growths respectively. During H1 2023, the prices have grown in YoY terms across all markets for the second time since H2 2015.
Shishir Baijal, CMD, Knight Frank India says, “Residential sales have been strong in most markets during H1 2023. The main drivers of market momentum are mid and premium segment homebuyers who possess both the desire and financial capability to purchase a home. The affordable housing segment has seen deceleration in its volume as well as market share decline significantly.”
He adds, “For the mid and premium segment, it is interesting to note that demand remained robust despite the increase in home loan rates during the first few months of the year, which highlights the enduring strength of the market.
