Home sales in India are set to create a new record, beating the highest numbers of the last decade, a report by real estate consultancy CBRE revealed on Wednesday. The firm in it’s report noted that home sales for the first half of 2023 have already touched 150,000 units and the sector is expected to touch 300,000 in the year.
CBRE, in it’s analysis titled, ‘Indian Real Estate: Taking Giant Strides – 2023 Mid-Year Outlook’, pointed out that home launches in 2023 are also projected to touch a 10-year high. Notably, both home sales and launches in India are estimated to breach the average of the last five years of 187,000 units and 184,000 units respectively, reported Business Standard.
Home sales between January to June period in the year stood at over 150,000 units, registering an increase of 4 per cent over the sales reported in the same period last year. The sales also reported an increase of 6 per cent over the sales in the second half of 2022.
Commenting on launches, the report noted that consistent momentum in demand encouraged developers to launch more than 150,000 new housing units in the first half of 2023, registering a growth of 11 per cent annually. The consultancy firm added that mid-end homes in India have breached the price tag of Rs 1 crore due to an increase in construction costs and demand in the segment. Further, the report stated that demand in the price range of Rs 1-1.5 crore is expected in the months to come.
In conversation with Business Standard, CBRE’s chairman and CEO (India, South-East Asia, West Asia, and Africa), Anshuman Magazine, noted that the home loan rates in India have shown stability in comparison to Western countries and this has helped increase the demand for homes. In addition to affordability, the CEO also credited the increase in residential sales of expensive homes to the evolving preferences of domestic buyers.
Notably, the Reserve Bank of India (RBI) decided to keep on hold the repo rate hikes after a cumulative 250 basis point jump in April this year.
“There is a change in the mindset of younger people. Everybody wants more space. Earlier, the focus was on ticket size, but now people want bigger space. Also, especially after the Covid-19 pandemic, there is a focus on having a better lifestyle. Aspirations have gone up exponentially,” Magazine said.
Talking about another factor that helped increase the demand, Magazine noted that the increase in real estate prices as more people look at the sector as an investment avenue has added to the popularity among buyers. The report further stated, “The premium and luxury segments (Rs 2 crore and above) are also expected to emerge as a sought-after investment avenue, particularly among high-net-worth individuals (HNIs) and non-resident Indians (NRIs).”
The report pointed out that buyers now consider factors like health and safety, sustainability, and integration of smart technologies before purchasing a home. “Buyer interest will continue to be driven by factors such as reputation, execution capability, and financial stability of the developers. Tier-I developers, backed by their proven delivery track record and solid market reputation, consistently dominated the market in terms of new launches and sales from 2018 to H1CY23. We expect this trend to continue gaining momentum,” it added.
CBRE, however, cautioned that there might be a mismatch between demand and supply from next year onwards amidst an increased supply expected across the market in the next two quarters.