1.

1 About the sector

Residential sector in India is seeing an increase in demand for luxury housing as it enters
more markets and the nation has the fastest post-pandemic recovery. With the pandemic's
effects starting to fade in early 2020, India's residential market has experienced astounding
development in recent years. Along with a significant increase in property prices, 2022 saw
record-breaking launches and sales.

According to a report published by JLL, in “Buyer preferences are reshaping

India’s residential markets”: that, despite economic challenges on the domestic and
international fronts during the past two years, there has been a marked increase in demand
for luxury property across the nation. Interest in upper-mid, premium, and luxury
segments peaked across the nation during the rapid post-pandemic rebound in residential
real estate. In comparison to the years before to the pandemic, these three segments' share
of revenue and new product launches has increased during the past two years.

Figure 1 Definition of Price segments across cities

(Ganugu, 2023)
Prior to COVID, the share of upper-mid, premium, and luxury segments in new launches
was around 20%; however, by 2021 and 2022, it had grown to 27% and 36%, respectively.
The sales share of all three divisions also increased significantly, from 15% prior to COVID
to 20% in 2021, and then increased even more to 25% in 2022. Given the revived interest in
home ownership among purchasers across all income levels in India, cheap and mid-segment
housing continued to maintain significant traction in the country's residential market despite
the rapid spike in demand for premium housing.
Classification of new launches across segments

Figure 2 Classification of new launches across segments

(Ganugu, 2023)

Classification of sales across segments

Figure 3 Classification of Sales across segments

(Ganugu, 2023)

According to a data provided by CMIE: In the years 2023–2024, the real estate sector is
anticipated to record higher revenues and profits. The year-round demand for residential
homes is expected to support an increase in industry revenues. Additionally, developers are
likely to raise their prices in response to any increase in input costs. As a result, the industry's
margins are probably going to increase.

While residential sales are anticipated to increase in 2023–2024, the rate of expansion
will be slower than it was in 2022–2023. The current fiscal year's house sales are projected to
be moderated as a result of rising home loan rates and property values, a slowdown in hiring
in important employment-generating industries, and slower wage growth.

In order to control inflation, the Reserve Bank of India (RBI) began raising the short-
term lending rate in April 2022. The RBI has increased rates by a total of 250 basis points
(bps) so far. In the March 2023 quarter, leading cities nationwide saw an increase in real
estate prices of between 5 and 20 percent as a result of developers raising prices to pass on
the rise in input costs to consumers. Out of 50 cities, 43 have seen an increase in prices this
quarter. According to the Housing Price Index (HPI) issued by the National Housing Bank,
property prices increased during the quarter across India's eight largest residential markets,
including Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune.
(Shah, 2023)

Figure 4 Growth in Housing Price Movement in Mumbai, CMIE

(Shah, 2023)
Throughout the remaining months of 2023, we anticipate that home prices will
continue to rise. This will increase the cost of purchasing a property together with interest
rates, which will have an effect on housing demand. (Shah, 2023)
 In a report published by CII and ANAROCK’s regarding the "Housing Market Boom
(Navigating the Residential Real Estate Landscape)" Despite issues with the world economy,
such as layoffs by numerous large and small firms, the bull run in the Indian real estate
market persisted in the first quarter of the year. The business remained booming, and
intriguingly, numerous new trends were seen. (Chaturvedi, 2023) For instance, the first
quarter of 2023 saw an all-time high in quarterly housing sales with over 1,13,770 units sold
across the top 7 cities, largely due to an increase in demand for expensive properties (>INR
1.5 Cr). (Chaturvedi, 2023)

 Compared to the approximately 99,550 units sold in Q1 2022, this is a 14% annual
increase.
 The two western regions, MMR and Pune, accounted for more than 48% of all sales
in the top 7 cities, with Pune experiencing an increase of more than 42% annually.
 As well as breaking the one lakh milestone, new launches in the top 7 cities had a
23% annual increase, going from 89,140 units in Q1 2022 to over 1,09,570 units in
Q1 2023.

Figure 5 ANAROCK: Real estate GDP contribution

(Chaturvedi, 2023)

In comparison to 89,100 units in Q1 2022 and 92,900 units in Q4 2022, the top 7 cities had
new launches of about 1.09 lakh units in Q1 2023, representing an increase of 18% from the
previous quarter and 23% on an annual basis.
Figure 6 Housing sector new peak 1 (Chaturvedi, 2023)

Figure 7 New Launch coming in cities (Chaturvedi, 2023)