The residential sector is in the spotlight as it has emerged as one of the best-performing real estate asset classes in the country. As per the recent MarketBeat report released by Cushman & Wakefield, Q1-23 has seen quality launches across key markets, exhibiting a strong momentum.
The first quarter witnessed a stellar number of ~80,000 units being launched across the top eight real estate markets in India. The trend witnessed since last few quarters, whereby the share of high-end and luxury in overall launches was rising, was visible in Q1 too. Q1-23 witnessed 39% share of high-end and luxury launches.
According to data, the residential market of Delhi NCR witnessed ~7,800 new launches in Q1-23, indicating over 111% increase on a q-o-q basis and a 109% growth compared to Q1-22. The report further highlighted that around 94% of these units were launched in Gurugram and are concentrated around the micro markets of Golf Course Road, NH8 and Dwarka Expressway.
While the mid and the high-end luxury segments dominated most of the launches with 49% and 39% shares respectively, the affordable segment also significantly added up to the numbers with around 3,572 unit launches in Sohna.
Though the Haryana govt has raised its circle rates by 30% in the prime micro-markets, impacting new transactions to an extent, the high demand and scope for capital appreciation in the mid and high-end segments will garner positive investor interest, thus giving a further boost to the residential market.
Apart from Delhi NCR, key cities like Mumbai, Hyderabad, Bengaluru, and Chennai have also exhibited growth with prominent new launches across all three segments. In Q1-23, Mumbai witnessed a launch of 19,063 units, recording a 16% q-o-q growth. Interestingly, almost 80% of the quarterly launches witnessed in Western Suburbs are near the now-operational metro line corridors (Metro Lines 1,2A & 7). Like the Delhi-NCR market, launches in various micro markets of Mumbai are also driven by the mid and high-end segment, with some contribution from the affordable sector.
In the Southern market, Hyderabad is leading with ~14,000 new launches, recording a 56% q-o-q growth. The majority of the launches were dominated by the high-end and premium segments with the western quadrant contributing around 97% of it. In Chennai, the first Quarter witnessed healthy launches of around 8,100 units. Owing to a robust momentum, the developers are continuing with newer launches, and this is giving a further boost to the residential sector of the city and its various sub-markets. In Bengaluru, around 7,700 residential units were launched during the first quarter of the year, a 16% decline over the previous quarter. The eastern quadrant (Whitefield, KR Puram, Budigere Cross), a prime IT hub, was the major contributor to Q1 launches with a 43% share.
Speaking of the developments in the sector, Shalin Raina, Managing Director, Residential Services, commented – The post-pandemic rebound story of the residential segment has been phenomenal and looking at the historical data of the last few quarters one can easily deduce how the sector has grown exponentially. Amidst a surging demand and consistent new unit launches, the sector’s growth momentum has picked pace, largely dominated by the mid & high-end segments. While globally, equity markets have exhibited heightened volatility, and in India, the valuations are also high, investors feel safer today to invest in premium real estate. Besides, the appetite amongst India’s HNIs to invest in residential properties has always been relatively much higher. If we look closely at these trends, we can anticipate that the coming years will be bullish for the residential segment.