Tier-1 cities across India have seen surplus growth in housing supply in FY22-23 due to a plethora of new launches by property developers. While sales have also seen growth during this period, there is still a sharp increase in unsold residential units as well. Liases Foras, a non-broking real estate data analytics and research firm, has analysed and published a report covering India’s residential real estate market in FY22-23.
The top tier-1 cities and their corresponding municipal regions – Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Pune, Bengaluru, Hyderabad, Ahmedabad, Chennai and Kolkata, have seen strong growth in new supply, with over Rs5trn (trillion) worth of supply being launched in FY22-23. Sales of residential units in the same period also had growth and stands at a value of Rs2.9trn.
In comparison, unsold supply in these cities has ballooned to over Rs1.3trn worth of stock in the same period. Liases Foras reports that, despite this, the month’s inventory (on units) has stayed the same, as new supply has been one of the driving forces guiding sales. A surge in new launches in the luxury segment (units worth over Rs1 crore) in FY22-23 has also been recorded, along with favourable sales in the same segment.
Increase in New Launches
Comparatively, on a quarter-on-quarter (q-o-q) basis, for Q4FY22-23, the top-8 cities recorded new launches of 109,369 units, which is an increase of 12% compared to the previous quarter, when it was 97,614 units. The maximum increase in the launch of new units on a q-o-q basis was recorded in Chennai by 93%, followed by NCR (68%), Hyderabad (11%) and MMR (9%). The number of new launches in the same period declined in Ahmedabad by 6%.
When the data was compared on a year-on-year (y-o-y) basis, new launches across top cities saw an increase of 29% overall, with a maximum increase in Chennai by 405%, followed by Kolkata (102%), NCR (73%), Bengaluru (52%), Pune (28%), MMR (11%), Ahmedabad (10%) and Hyderabad (6%).
Increase in Sales
In Q4FY22-23, the top-8 cities recorded an increase in sales by 7% with 81,438 units. Chennai and NCR saw the highest percentage gain in sales at 18% and 16% growth respectively. Bengaluru witnessed no gain in sales when compared on a q-o-q basis and other cities saw a marginal improvement of below 10% in the same period.
When the data is compared on a y-o-y basis, the top eight cities showed a growth in sales of 8%, with a maximum increase in Hyderabad by 28%, followed by Kolkata by 18%, MMR by 18%, NCR by 8% and Pune by 5%. In comparison, sales decreased by 16% in Chennai, 6% in Bengaluru and 2% in Ahmedabad during the same period.
Unsold Stock
Comparing unsold stock in the top eight cities on a q-o-q basis, there is a marginal increase of 4% overall, with the highest percentage of unsold units being recorded in Hyderabad by 11%. It has also increased in other cities – Ahmedabad by 5%, Kolkata, MMR and Chennai by 4%, Bengaluru by 3% and Pune by 2%. Only NCR saw no growth in unsold units on a q-o-q basis for Q4FY22-23.
On a y-o-y basis, unsold stock increased by 15% overall in March 2023, compared to the same period last year. Again, Hyderabad saw the maximum increase in unsold stock at 38%, followed by Ahmedabad at 37%, MMR at 29%, Kolkata at 13% and Pune at 2%. In the same period, unsold stock has decreased in the NCR by 7%, Bengaluru by 2% and Chennai by 1%.
Overall Decline in Prices
Prices for residential units in these cities have declined overall by 2% on a q-o-q basis, with the highest decrease in the NCR by 7%. Ahmedabad and Bangalore saw an increase in prices of 2% and 4% respectively in the same period. Comparatively, on a y-o-y basis, prices have increased by 8%, with a maximum increase recorded in NCR by 27%, followed by Bengaluru (16%), Kolkata (15%), Hyderabad (12%), Ahmedabad (10%), Pune (9%) and Chennai (7%). Surprisingly, prices for residential units in MMR have decreased by 1% when compared on a y-o-y basis.
MMR and NCR Comparison
In the MMR, on a q-o-q basis, the island city (Colaba/Cuffe Parade till Mahim and Wadala) saw a significant improvement in sales by 119% in Q4FY22-23, while the central suburbs (Sion till Mulund) saw a decline of 20% in the same quarter. Unsold stock in this period grew marginally in all suburbs except the central suburbs and the city. On a y-o-y basis, sales improved significantly again in the island city (175%) and Thane (99%). Unsold stocks increased in all suburbs with an average increase of 29% overall in MMR, compared to last year.
In the NCR, sales increased on a q-o-q basis in Q4FY22-23 by 16%, with Gurugram, which is the largest market in terms of sales in the region, seeing a growth of 65%. On a y-o-y basis, overall sales increased by 8% in the NCR, while recording a decline in Greater Noida, Noida and Ghaziabad. The unsold stock decreased by 7%, with Faridabad having the steepest decline of 31%.
