Informist, Monday, Mar 27, 2023
By Shiladitya Pandit
MUMBAI – Demand for premium properties remained strong in the Jan-Mar quarter, even as the affordable housing segment continued to be relatively under pressure.
Overall home sales rose 14% in the top seven cities of India during this period, with the share of premium category rising to 24% of the total volume, according to the quarterly report published by real estate consultant Anarock. Properties priced at 15 mln rupees and above are counted in the premium category.
"Our interaction with corporates and experts shows strong premium housing demand sustaining thus far," said broking firm Jefferies in a note issued after its annual real estate summit. "Opinion seems more uneven on the lower-end of housing," it added.
Vivek Rathi, director of research at real estate consultant Knight Frank India, pointed out that the first quarter saw headwinds such as higher house prices in most markets and increased government stamp duty, besides rising home loan rates.
"The mid and premium segment housing is in a better position to tide with the challenges compared to the affordable housing segment," he said. Buyers in these segments have the ability to tap other ways of financing their purchases, besides taking a home loan, he said.
OVERALL GROWTH
Thanks to resilient demand in higher segments, the overall sector saw strong growth.
As of Monday, Anarock said that the top seven cities saw sales of 113,770 units in Jan-Mar this year, compared to 99,550 units last year. These cities include Mumbai Metropolitan Region, National Capital Region, Kolkata, Chennai, Bengaluru, Hyderabad, and Pune.
The Mumbai Metropolitan Region was the runaway leader in terms of home sales for the period at 34,690 units, while Pune came second at 19,920 units. Together, Mumbai and Pune drove nearly half of home sales in the ongoing quarter, according to Anarock's quarterly real estate tracker. Mumbai saw 19% on-year growth in home sales, while Pune saw a jump of 42%.
Among other markets, Kolkata recorded a modest 3% growth in home sales during the period. National Capital Region was the only major market to record a dip in home sales for the Jan-Mar period, by around 9% on year to 17,160 units.
Pointing to continued strength, the number of launches – which refers to new project announcements – grew even faster, at 23% on the year to 109,570 units, according to Anarock's report.
All cities, except Hyderabad, reported an increase in supply of new housing units, while the number of new home launches in Chennai over the same period grew by 110%, Anarock added.
SIZE ADVANTAGE
The outlook continues to be strong for the coming months, especially for organised players and the others who have a strong presence in the premium segment.
Jefferies said financial advantages of real estate developers will be a key differentiator going forward, with consolidation in the real estate space expected to continue. Listed residential players are expected to post sales growth in the next fiscal, Jefferies said.
Speaking at the Jefferies summit, Godrej Properties Chairman Pirojsha Godrej said the impact of persistent rate hikes by the Reserve Bank of India on home sales has been negligible. He added that demand in the premium segment was subdued in the pre-pandemic period, which explains the contrast in demand recoveries across housing ticket sizes, according to the Jefferies note.
At the same time, there were also those who warned of some negative fallout of the current troubles faced by the banking and financial sector, as well as the rising interest rates.
One of them was Anarock's chairman, Anuj Puri, who pointed to the possibility of two difficult quarters ahead.
"Emerging headwinds could pose a challenge in the short-term. Persistent inflation concerns along with another possible rate hike by the RBI in the near future could dent the housing market's growth trajectory in the upcoming two quarters. Once the dust of the ongoing economic disruptions settles, it is likely to regain again, backed by rise in homeownership sentiment," Puri said in a statement. End
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2023. All rights reserved.
Informist, Monday, Mar 27, 2023
By Shiladitya Pandit
MUMBAI – Demand for premium properties remained strong in the Jan-Mar quarter, even as the affordable housing segment continued to be relatively under pressure.
Overall home sales rose 14% in the top seven cities of India during this period, with the share of premium category rising to 24% of the total volume, according to the quarterly report published by real estate consultant Anarock. Properties priced at 15 mln rupees and above are counted in the premium category.
"Our interaction with corporates and experts shows strong premium housing demand sustaining thus far," said broking firm Jefferies in a note issued after its annual real estate summit. "Opinion seems more uneven on the lower-end of housing," it added.
Vivek Rathi, director of research at real estate consultant Knight Frank India, pointed out that the first quarter saw headwinds such as higher house prices in most markets and increased government stamp duty, besides rising home loan rates.
"The mid and premium segment housing is in a better position to tide with the challenges compared to the affordable housing segment," he said. Buyers in these segments have the ability to tap other ways of financing their purchases, besides taking a home loan, he said.
OVERALL GROWTH
Thanks to resilient demand in higher segments, the overall sector saw strong growth.
As of Monday, Anarock said that the top seven cities saw sales of 113,770 units in Jan-Mar this year, compared to 99,550 units last year. These cities include Mumbai Metropolitan Region, National Capital Region, Kolkata, Chennai, Bengaluru, Hyderabad, and Pune.
The Mumbai Metropolitan Region was the runaway leader in terms of home sales for the period at 34,690 units, while Pune came second at 19,920 units. Together, Mumbai and Pune drove nearly half of home sales in the ongoing quarter, according to Anarock's quarterly real estate tracker. Mumbai saw 19% on-year growth in home sales, while Pune saw a jump of 42%.
Among other markets, Kolkata recorded a modest 3% growth in home sales during the period. National Capital Region was the only major market to record a dip in home sales for the Jan-Mar period, by around 9% on year to 17,160 units.
Pointing to continued strength, the number of launches – which refers to new project announcements – grew even faster, at 23% on the year to 109,570 units, according to Anarock's report.
All cities, except Hyderabad, reported an increase in supply of new housing units, while the number of new home launches in Chennai over the same period grew by 110%, Anarock added.
SIZE ADVANTAGE
The outlook continues to be strong for the coming months, especially for organised players and the others who have a strong presence in the premium segment.
Jefferies said financial advantages of real estate developers will be a key differentiator going forward, with consolidation in the real estate space expected to continue. Listed residential players are expected to post sales growth in the next fiscal, Jefferies said.
Speaking at the Jefferies summit, Godrej Properties Chairman Pirojsha Godrej said the impact of persistent rate hikes by the Reserve Bank of India on home sales has been negligible. He added that demand in the premium segment was subdued in the pre-pandemic period, which explains the contrast in demand recoveries across housing ticket sizes, according to the Jefferies note.
At the same time, there were also those who warned of some negative fallout of the current troubles faced by the banking and financial sector, as well as the rising interest rates.
One of them was Anarock's chairman, Anuj Puri, who pointed to the possibility of two difficult quarters ahead.
"Emerging headwinds could pose a challenge in the short-term. Persistent inflation concerns along with another possible rate hike by the RBI in the near future could dent the housing market's growth trajectory in the upcoming two quarters. Once the dust of the ongoing economic disruptions settles, it is likely to regain again, backed by rise in homeownership sentiment," Puri said in a statement. End
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2023. All rights reserved.
