Housing Sales In Volume Terms Grew 11% Across Seven Cities In Q3: ICRA
Residential real estate sector saw strong demand in Q3 of FY2023 with 11% year-on-year growth in area sold, ICRA said.
Housing sales in volume terms grew 11% in the third quarter of this fiscal across seven cities on better demand, according to rating agency ICRA.
"At 149 million square feet, the reported sales in Q3 FY2023 in the top seven cities in India is the highest quarterly sales recorded in over ten years," ICRA said in a statement on Wednesday.
Residential real estate sector saw strong demand in Q3 of FY2023 with 11% year-on-year growth in area sold, it added.
The area sold in the first nine months of FY23 increased to 412 million square feet against 307 million square feet in the corresponding period of the previous year.
Post pandemic, ICRA noted that there has been a gradual shift in the overall segment-wise composition with a rise in the share of the luxury and mid segments to the overall sales across the top seven cities -- Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, National Capital Region and Pune.
The share of the luxury and mid segments to the overall sales has increased from 14% and 36%, respectively in FY20 to 16% and 42%, respectively, in the April-December of FY23.
Anupama Reddy, Vice President and Co-Group Head - Corporate Ratings at ICRA, said: "The value of the area sold in the residential real estate sector is expected to grow by 8-12% in FY23 and a further 14-16% in FY24."
This is based on the sample of top 12 listed real estate developers. The shift towards larger spaces/ upgrade and preference for home ownership is expected to continue.
Notwithstanding the rate hikes by the Reserve Bank of India during the current fiscal, the home loan interest rates are still lower than the peak pre-Covid interest rates and the affordability continues to remain healthy, the rating agency said.
"While low inventory overhang and calibrated launches work in favour of developers, the impact of a growth slowdown on the job market and increase in interest rates on affordability pose risks," Reddy said.
The unsold inventory levels dipped to 839 million square feet as of Dec. 2022 from 923 million square feet as of Dec. 2021. Consequently, ICRA said the years-to-sell for the unsold inventory decline to a decade-low 1.5 years.
Further, the rating agency said the average sale price rose by 10% in Q3 of FY23 on a year-on-year basis, driven by the partial pass-on of increase in input costs, as well as change in the product mix with a higher share of luxury units.
Builders included in ICRA's sample set were Ashiana Housing, Brigade Enterprises, DLF Ltd, Godrej Properties, Keystone Realtors, Kolte-Patil Developers, Macrotech Developers, Mahindra Lifespaces Developers, Prestige Estate Projects, Puravankara, Sobha Ltd. and Sunteck Realty.