Record-Breaking FY24 for India's Residential Real Estate Market: 20.1% Surge in Demand

The Indian residential real estate market saw unprecedented growth in FY24, with a 20.1% YoY increase in area absorbed. Despite an 11.5% rise in supply, inventory in major cities hit a record low of 12 months. Home prices rose by an average of 9.0% YoY, resulting in overall market growth of 29% for the fiscal year.

The Indian residential real estate market attained its highest-ever performance in FY24, registering a 20.1% year-on-year (YoY) surge in absorbed area, according to a report by JM Financial. This robust demand was accompanied by an 11.5% YoY rise in supply, yet inventory levels in key cities plummeted to a record low of 12 months, steered by sustained demand.

The sector saw an average YoY price increase of 9.0%, driven by both price hikes and a favorable product mix. This contributed to the market's overall growth of roughly 29% during the fiscal year. Pre-sales for listed companies, especially tier 1 developers, skyrocketed by 39.5% YoY, emphasizing their continued market share gains and the rising preference for branded, high-end products.

Bengaluru's residential market emerged as one of the top performers, sustaining its strong growth trajectory since FY21. In FY24, the city witnessed an 18.1% YoY rise in sales, with 102.7 million square feet (MSF) absorbed against 95.9 MSF launched. Demand consistently outpaced supply in Bengaluru, leading to an 8.3% decline in unsold inventory, measured at 75.1 MSF end of FY24. Property prices in the city have enjoyed a compound annual growth rate (CAGR) of approximately 10.7% over FY20-24, underscoring sustained demand and a vibrant market.

The National Capital Region (NCR) recorded a slight decline in residential sales in 4QFY24, with a 10.2% YoY drop in absorption. However, the region still achieved a 10.9% YoY sales increase for the full fiscal year, selling 79.4 MSF in total. The Mumbai Metropolitan Region (MMR) demonstrated strong momentum, realizing a 20.4% YoY sales increase for FY24, despite a 3.5% YoY decline in new launches. Residential prices in MMR have experienced a CAGR of 7.7% over FY20-24, driven by steady demand, particularly in the premium segment.

Hyderabad's residential market continued to thrive with a 28.0% YoY increase in sales for FY24, propelled by a 20.0% YoY rise in 4QFY24 alone. The city’s growing attraction as a lifestyle destination has spurred demand, although an increase in supply has resulted in higher unsold inventory.

Conversely, Chennai witnessed a 9.5% YoY decrease in 4QFY24 sales, despite a striking 50.0% YoY increase in launches. The market posted a 7.9% YoY sales uptick for FY24, with property prices rising at a CAGR of 7.4% over FY20-24. With inventory levels at historical lows, increasing disposable incomes, and limited supply expansion, the residential real estate sector is expected to continue its growth in FY25.

Propequity forecasts 18% market growth, consisting of a 12% rise in volume and a 6% price lift. While supply is projected to grow moderately, inventory levels are likely to remain robust due to strong absorption rates. (ANI)