After a two-year bull run, residential real estate activity across the top cities stabilised in Q3 (July-September) 2024 as housing sales across the top 7 cities dipped 11% annually clocking 1,07,060 units in the quarter against 1,20,290 units in Q3 2023, the latest data by real estate consultancy ANAROCK reveals.
The July-September period, typically considered a slow quarter due to monsoon and perceived inauspiciousness, saw new supply dipping 19% annually at 93,750 against 1,16,220 units in the year-ago period. Quarterly, there was a 20% drop as around 1,17,170 units were launched in Q2.
However, sales continued to outstrip new supply in Q3 2024, reflecting continued health in the market. NCR, MMR, Bengaluru and Pune accounted for 80% of the sales, with MMR (Mumbai Metropolitan Region) recording the highest 36,190 unit sales, a 6% yearly drop.
“Among the top 7 cities, MMR recorded the highest sales of approx. 36,190 units, followed by Pune with approx. 19,050 units. Cumulatively, the two western cities accounted for 52% of the total sales across the top 7 cities. All the top cities individually recorded a dip in housing sales,” says Anuj Puri, Chairman – ANAROCK Group.
Puri says the Q3 housing sales tapered down amid high prices and the monsoon. "As always in this period, the ‘shraad’ period also suppressed demand to an extent as many Indians defer home buying in this period. Overall, the housing market is stabilising after creating a new peak in Q1 2024.”
In terms of prices, escalating input costs as well as significant sales growth pushed the average residential property rates collectively by 23% annually -- from ₹6,800 per sq. ft. in Q3 2023 to ₹8,390 per sq. ft. in Q3 2024. Hyderabad saw the highest 32% jump in average prices.
Segment-wise, houses with less than ₹1.5 crore price tag were in the maximum new supply and recorded a 33% increase in Q3, followed by the premium (₹80 lakh-₹1.5 crore) at 30% and the mid-segment (₹40– 80 lakh) at 23%. The affordable segment's share fell further to just 13% – the lowest in a quarter.
Amid high hopes for the upcoming festival season, developers have lined up several projects and stakeholders expect an uptick in demand, but growth in the upcoming quarters may not be as steep as seen in the last 1-2 years. "Residential prices too seem to have peaked out and are now gradually stabilising across cities. Developers are likely to roll out several offers and discounts during the upcoming festive quarter to attract buyers," says Puri.
Strong office leasing in Q3
While the residential sector saw tapering of the demand in Q3, the office demand soared, recording a 31% YoY growth. The latest data put out by real estate consultancy Colliers shows Q3 2024 saw space take-up to the tune of 17.3 million sq ft, with Bengaluru and Hyderabad accounting for over half of the leasing activity.
Bengaluru registered its highest-ever leasing in any quarter at 6.3 million sq ft, continuing its dominance in the office market, followed by Hyderabad and Pune at 2.9 mn. Sq. ft. and 2.6 mn. sq. ft.
In new supply, the total area of 14.4 million sq. ft. saw completions in Q3 2024, registering a 33% increase YoY, with Bengaluru and Hyderabad seeing 64% of the quarter’s new supply. Delhi-NCR also saw its highest quarterly supply infusion in the last 8 quarters, at 3.3 million sq. ft.
“Office space demand in Bengaluru, Hyderabad and Mumbai have reached close to or surpassed 2023 demand levels in the first three quarters of 2024. Occupier confidence is reflected in continued higher uptake of large-sized deals of more than 1 lakh sq. ft., accounting for 65% of total leasing in Q3 2024. Bengaluru saw 81% of its leasing through large-sized deals, while Pune followed closely with 71%, driven by the Tech and BFSI sectors,” says Arpit Mehrotra, Managing Director, Office Services, India, Colliers.
The technology sector drove around one-fourth of the overall office space demand during Q3, followed by BFSI occupiers and Flex space operators.
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