NEW DELHI: The Indian real estate market has recently shown signs of contraction, with housing sales in the top eight cities declining by 5 per cent during the July-September quarter of 2023, according to a report by PropTiger.com.
The decline, marked by a reduction in new residential supply and significant price appreciations, highlights the evolving dynamics of the residential sector amid economic uncertainties.
During this period, a total of 96,544 residential units were sold, a decrease from 101,221 units in the same quarter of the previous year. This downturn can be attributed to a 25 per cent fall in the number of new residential units launched, dropping from 123,080 to 91,863. Such a reduction in supply, coupled with an average price increase of nearly 20 per cent across these cities, has significantly impacted housing affordability, ultimately discouraging potential buyers.
Delhi-NCR steals limelight
Notably, the sales figures exhibited regional disparities. While Delhi-NCR experienced a notable 29 per cent increase in sales, reaching 10,098 units, other major cities witnessed declines.
For instance, Bengaluru and Ahmedabad recorded sales drops of 11 per cent and 9 per cent, respectively. Major cities like Hyderabad and Kolkata faced even steeper declines of 19 per cent and 22 per cent.
Meanwhile, the Mumbai Metropolitan Region saw a minimal dip of 1 per cent, illustrating the varied responses to the shifting market conditions.
Vikas Wadhawan, CFO of REA India, characterised the market’s year-on-year decline as a reflection of consumer sentiment towards escalating prices. He emphasised a notable moderation in market activity, which while challenging, may ultimately be beneficial for end-users by fostering sustainable growth. Interestingly, this moderation allows buyers time to adjust to the new price realities, fostering an environment of stability in a previously frenzied market.
Looking ahead, the upcoming festive season is anticipated to revitalise market activity, as developers are expected to introduce attractive offers aimed at stimulating buyer interest. With a recalibration of supply strategies, particularly in cities like Hyderabad and Pune, the real estate sector may see a resurgence in sales as consumer confidence potentially regains momentum.
