Real Estate Trends in Major Indian Cities

Slowing New Property Launches

Despite a buoyant real estate market, major Indian cities experienced a slowdown in the pace of new project launches during the first quarter of 2024. Mumbai witnessed a 2% decline, while Ahmedabad saw a 4% decrease in new launches. Similarly, the National Capital Region (NCR) and Hyderabad recorded marginal increases of 3% and 1% respectively.

Mixed Performance Across Cities

However, the situation varies across different cities. Bengaluru witnessed a notable 9% increase in new launches, while Kolkata experienced a staggering 89% surge. Pune and Chennai also showed healthy growth rates of 15% and 10% respectively. Overall, new project launches across the top 8 cities of India saw a 7% growth.

Factors Driving Growth

According to Knight Frank India’s report, the surge in new launches can be attributed to depleted older inventory, prompting consumers to explore newly launched properties with attractive prices. This trend has resulted in a reduction of the average inventory age from 16.7 quarters at the end of 2023 to 15.9 quarters in Q1 2024.

Sales Growth Dynamics

While overall sales across major cities grew by 9% in the Jan-Mar 2024 quarter, there were notable exceptions. NCR and Bengaluru witnessed tepid sales growth, with NCR recording a marginal 1% increase and Bengaluru facing a 2% decline in sales. In contrast, Pune and Kolkata exhibited robust double-digit growth in both sales and new launches.

Shifting Market Dynamics

Interestingly, there has been a significant increase in the sales of high-value homes priced at ₹1 crore and above, accounting for 40% of total sales. This marks a notable shift from the previous year when they constituted only 29% of sales. Conversely, units priced below ₹50 lakh experienced a decline in sales, continuing a trend of deceleration over the past nine quarters.

Insights from Knight Frank India

Shishir Baijal, Chairman & Managing Director of Knight Frank India, attributes the surge in high-value home sales to strong demand and buyers’ confidence in long-term investments. This trend underscores the evolving dynamics of the residential real estate segment in India’s major cities.