Residential Real Estate Market In India’s Tier-1 Cities: Delhi-NCR Leads with 95% Surge In New Launches, Hyderabad And Pune Experience Declines: Report

The latest report by PropEquity, which includes the residential market in Tier-1 cities in India has revealed mixed results with some new launches and sales having a noticeable decline as compared to the previous quarter, although the market health still looks resilient and robust.

Cities like Hyderabad and Pune have seen considerable decline, according to the report, with new launches in Hyderabad declining by 36% Year-on-Year, while Pune’s launch decreased by 47%. However, the situation in Delhi-NCR looks much more brighter with a Year-on-Year growth of 95% in its new launches, rising from 5708 units in Q2 2023 to 11,118 in Q2 2024. The NCR is comprised of Delhi, Noida, Ghaziabad, Faridabad, Gurugram, and Greater Noida.

Key Findings From The Report

A report by PE Analytics Ltd. provides insights into the trends of apartments, independent floors, and villas/row houses, excluding sales on hold, construction on hold, and lottery projects.

In Q2 2024, the number of new residential units launched decreased by 7% to 97,331 units compared to 104,319 units in Q1 2024. This marks a smaller year-on-year (Y-o-Y) decline of 13% from 111,657 units in Q2 2023. The decline in new supply during Q2 is partly attributed to it being an election quarter, a period when developers typically hold back on launching new projects.

Residential unit sales or absorption in Q2 2024 totaled 119,901 units, down by 18% from 146,147 units sold in Q1 2024. The Y-o-Y comparison shows a marginal decrease of 2% from 121,856 units sold in Q2 2023.

Delhi-NCR stood out with a 7% increase in sales quarter-on-quarter (Q-o-Q), indicating strong demand despite the overall market slowdown. However, cities like Hyderabad and Pune experienced significant declines in sales, with Hyderabad down by 20% Y-o-Y and Pune by 15% Y-o-Y.

City-wise Breakdown Of Analytics

In Delhi NCR, new launches surged by 95% Y-o-Y to 11,118 units, with sales increasing by 7% Q-o-Q to 10,198 units. This performance underscores the resilience of the capital region’s real estate market amid broader economic uncertainties.

Bangalore maintained stable sales despite an 8% Q-o-Q decrease in new launches to 14,297 units, recording sales of 15,127 units, reflecting a balanced demand-supply situation.

Chennai saw a notable 67% Y-o-Y increase in new launches to 5,754 units and steady sales with 4,841 units sold, indicating a relatively stable market. Mumbai experienced a slight decline in new launches by 6% Y-o-Y to 9,918 units, and sales also saw a marginal drop of 1% Y-o-Y, totaling 13,032 units, reflecting cautious market sentiment.

Navi Mumbai saw new launches grow by 17% Q-o-Q to 6,937 units, with a substantial 36% Y-o-Y increase in sales, reaching 9,035 units, indicating strong buyer interest.

Pune witnessed a sharp 47% Y-o-Y decrease in new launches to 15,568 units, and sales also declined by 15% Y-o-Y to 22,482 units, indicating a subdued market sentiment.

Thane experienced a 10% Y-o-Y decrease in new launches to 18,726 units, while sales increased by 9% Y-o-Y to 25,041 units, indicating steady demand.

Kolkata reported a 26% Y-o-Y decline in new launches to 3,411 units but saw a 27% Y-o-Y increase in sales, totaling 5,130 units, indicating resilience in the market despite reduced supply.

Although there have been declines in the new aunches and sales the PropEquity report underlines that the overall market position is still positive and robust.

The report has underscored that Q1 2024 has been exceptional and recorded one of the highest absorption levels, which in turn made the decline reported in Q2 2024 look much more drastic.

Commenting on the Q2 report, Samir Jasuja, CEO & MD of PropEquity, stated, “The marginal drop of new launch supply in top tier 1 cities is just 8 percent which is primarily due to election quarter & Q2 being slightly sluggish as compared to other quarters of the year. However, the 20 percent higher Absorption/Sales as compared to new supply signifies upswing and good health in residential real estate continues and the market continues to be robust post covid.”

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