News release

11 July 2023

Residential sales surge to a 15-Year high in H1 2023

Q2 2023 records strongest quarterly sales since 2008: JLL

Capital flows

Investment sales and advisory

Living and multifamily

Financial services

Authors

Vatsala Sharma

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Sales of 126,500 units recorded in H1 2023, the highest in 15 years
Sales of 64,500+ units in Q2 2023 hit a new peak; highest since 2008
Bengaluru and Mumbai are the biggest markets with a combined 42% share of the H1 2023 sales
New projects finding greater buyer confidence - ~58% of the H1 sales (~73,000 units) contributed by launches recorded between January 2022-June 2023
Mid and premium segments drive maximum sales momentum with 24% and 21% share respectively
151,000 units launched in H1 2023;24% higher y-o-y

Mumbai, 10^th July 2023: In recent years, the residential market has consistently embarked on a new chapter of growth, driven by buoyant consumer sentiment, robust property launches, competitive pricing, and a conducive interest rate regime. Supported by a resilient domestic economy and a stable job environment, the residential market continued its upward trajectory in the first six months of 2023. Sales of over 126,500 units were recorded in H1 2023, marking a 21% year-on-year increase.

The strength of the residential market is evident from the robust sales volume recorded in the first half of 2023, with more than 62,000 units sold in each of the two quarters. Notably, Q2 2023 saw sales of over 64,500 units, representing a significant 4.0% quarter-on-quarter growth. It is interesting to observe that residential sales have consistently reached new peaks in each successive quarter over the past year. Aligning with this trend, Q2 2023 surpassed the previous historic high achieved in Q1 2023, making it the highest quarterly sales since 2008.

Prominent national and regional developers have experienced a substantial increase in sales for their new launches, driven by a strong interest from home buyers. Upon examining the quarterly reports of reputable developers, it is evident that 2023 is poised to establish itself as another record-breaking period for the residential market. This determination is based on the robust supply pipeline that developers have planned for the second half of the year, supported by sustained demand fundamentals.

H1 2023 sets new sales benchmarks, demonstrating robust growth

Sales (No of Units)	Q1 2023	Q2 2023	H1 2023
Bengaluru	13,029	13,596	26,625
Chennai	2,563	4,756	7,319
Delhi NCR	10,139	9,368	19,507
Hyderabad	8,123	7,802	15,925
Kolkata	3,160	2,662	5,822
Mumbai	12,988	13,200	26,188
Pune	12,038	13,163	25,201
India	62,040	64,547	126,587

Note: Mumbai includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai. Data includes only apartments. Rowhouses, villas, and plotted developments are excluded from this analysis. Source: Real Estate Intelligence Service (REIS), JLL Research

Bengaluru and Mumbai propelled half-yearly residential sales by 21% in H1 2023

Sales (No of units)	H1 2022	H1 2023	Growth (%)	City % share in H1 2023 sales
Bengaluru	23,452	26,625	14%	21%
Chennai	4,968	7,319	47%	6%
Delhi NCR	18,709	19,507	4%	15%
Hyderabad	9,449	15,925	69%	13%
Kolkata	7,753	5,822	-25%	5%
Mumbai	23,793	26,188	10%	21%
Pune	16,802	25,201	50%	20%
India	104,926	126,587	21%	100%

The larger markets of Mumbai and Bengaluru led the half-yearly sales, contributing 21% each of the total. Pune too made substantial strides accounting for 20%. In fact, all cities except Kolkata saw sales rise in H1 2023 compared to the year-ago period.

“The government's strong push, coupled with the Reserve Bank of India's decision to pause the repo rate in the last two instances, along with moderate inflation, have played a pivotal role in revitalizing the residential market. The demand for homes is projected to remain growth-oriented in the medium term as well. In H1 2023, the Indian residential sector witnessed remarkable progress, achieving historical sales of approximately 126,500 units. With the upcoming festive season and positive customer sentiment, we anticipate the residential market to reach new heights in the second half of the year. The alignment of residential demand and supply is expected to pave the way for sustained growth in this segment.” said Siva Krishnan, Senior Managing Director and Head – Residential, India, JLL.

New launches led the sales momentum in H1 2023

It is interesting to note that in H1 2023 the majority of the residential sales was driven by projects launched in the last 18-month period. Dr. Samantak Das, Chief Economist and Head Research & REIS, India, JLL said- “The Indian residential market witnessed significant growth during H1 2023 recording the highest sales in 15 years and increasing by 21% y-o-y. Interestingly, around 58% of the sales recorded in H1 2023 (~73,000 units) were contributed by projects that were launched from January 2022-June 2023. The increased traction in demand for recently launched projects depicts the increasing consumer confidence in under-construction projects as well. Over the last few years, there has been a robust influx of supply by branded developers. On the back of quality products, that are well-executed and getting delivered within the stipulated timelines, the risk appetite for consumers is also increasing.”.

It is also pertinent to note that older inventory, which was launched before 2018 and is nearing completion is also seeing traction. Developers are focusing on the timely completion of these on-going projects, leading to an increased interest in them. In H1 2023, around 12% of the sales were contributed by projects that were launched before 2018.

Notably, recent property launches have targeted not only the mid-segment but also the premium segment. Developers have become more cognizant of consumer demand in the post-COVID era and are aligning their launches accordingly, resulting in increased traction. These developers are launching premium residential projects and larger, well-amenitised plotted developments with integrated support infrastructure.

With unsold inventory declining in quality projects and limited ready-to-move options, completed projects constributed to only 13% of the half-yearly sales in 2023.

Majority of the sales in H1 2023 was contributed by mid-segment; however, the premium segment not far behind

The mid-segment apartment projects (INR 50 lakh – INR 75 lakh price category) dominated the half-yearly sales with a 24% share. However, the premium segment (more than INR 1.5 crore) also had a substantial share of around 21% in the H1 2023 sales volume.

The share of affordable apartments priced below INR 50 lakh declined from 24% in H1 2022 to 19% in H1 2023 sales. A similar trend was witnessed in mid-segment apartments where the share, though still the highest, has seen a drop from 28% in H1 2022 to 24% in the current first half.

The proportion by which sales are increasing in the premium segment (priced above INR 1.5 crore) is significantly higher compared to that of mid-segment apartments. Sales grew by 37% y-o-y in the case of premium apartments in H1 2023 whereas it increased by just 4% in the mid-segment. As a result, the share of premium apartments in half-yearly sales increased from 18% in H1 2022 to 21% in H1 2023. Apartments in the price category of INR 1 crore- INR 1.5 crore have seen the highest growth in sales of around 67% y-o-y in H1 2023. Their share has also increased from 14% in H1 2022 to 19% in H1 2023.

Sales by price range	H1 2022 (No of units)	H1 2022 (% share)	H1 2023 (No of units)	H1 2023 (% share)	Sales Growth % (H1 2023 over H1 2022)
Less than 50 lakh	24,987	24%	24,482	19%	-2%
50 lakh –75 lakh	28,933	28%	30,125	24%	4%
75 lakh-1 crore	17,529	17%	21,848	17%	25%
1 crore-1.5 crore	14,484	14%	24,121	19%	67%
Above 1.5 crore	18,993	18%	26,011	21%	37%
Total	104,926	100%	126,587	100%	21%

Source: Real Estate Intelligence Service (REIS), JLL Research

Robust demand leads to rise in capital values across the top 7 cities in India

Residential prices in major cities have risen in the range of 6-9% y-o-y, though Bengaluru has witnessed the highest increase of around 11-12% y-o-y. Kolkata, with an improving buyer sentiment, has started seeing a positive movement in prices as well, albeit at a slower pace, with prices up by 2% y-o-y. The rise in prices is seen across the spectrum of new projects that are seeing strong buyer demand. Even new phases of existing housing projects are being launched at higher prices. Despite the increase in prices, the sales traction remains very robust.

In the first quarter of 2023, an additional 14,000 units were sold in the plotted developments and villa categories in the top seven cities. Most of the sales activity was concentrated in the southern cities of Bengaluru, Chennai, and Hyderabad.

New launches remained buoyant in H1 2023

Residential launches of more than 151,000 units were recorded in H1 2023, a rise of 24% y-o-y. The launches also increased on a quarterly basis with over 76,000 units launched in Q2 2023. Encouraged by a strong consumer demand, developers have launched projects across the top seven cities of India. Most of the new launches were witnessed in Mumbai (24%), Pune (22%), and Hyderabad (19%).

New Launches (No of Units)	Q1 2023	Q2 2023	H1 2023	H1 2022	% Growth (H1 2023 over H1 2022)	% Share in H1 2023 launches
Bengaluru	11,745	11,329	23,074	23,795	-3%	15%
Chennai	3,310	6,538	9,848	3,395	190%	7%
Delhi NCR	9,152	5,505	14,657	5,586	162%	10%
Hyderabad	13,844	14,930	28,774	26,253	10%	19%
Kolkata	3,737	1,205	4,942	6,194	-20%	3%
Mumbai	16,867	19,200	36,067	33,794	7%	24%
Pune	16,340	17,436	33,776	22,475	50%	22%
India	74,995	76,143	151,138	121,492	24%	100%

Notably, the majority of the new launches in H1 2023, were in the premium segment (apartments in the price bracket of above INR 1.50 crore) with a share of 29%. Around 24% of the launches were in the price bracket between INR 1 crore- 1.5 crore.

Unsold inventory increased by 2% Q-o-Q in Q2 2023

As of Q2 2023, unsold inventory across the top seven cities of India increased by 2% on a q-o-q basis with new launches outpacing sales. Mumbai, Hyderabad, and Bengaluru together accounted for 63% of the unsold stock. An assessment of years to sell (YTS*) shows that the expected time to liquidate the stock has declined from 2.7 years in Q1 2023 to 2.5 years in Q2 2023, indicating robust sales growth.

Outlook:
India has succeeded in sustaining economic growth and maintaining job stability, resulting in phenomenal growth for the residential market over the past year. With policy rates unchanged in the last two monetary policy meetings by the RBI, potential homebuyers can continue to access housing loans at existing interest rates, thereby boosting the demand for residential properties.

In H2 2023, we anticipate steady launches as developers expand their land banks, capitalizing on expected interest rate moderation, growing housing demand, and support from institutional funding agencies. Reputed developers have announced a robust supply pipeline, set to be launched within the next 7-8 months.

Driven by unprecedented sales, new residential projects are expected to gain further strength through strategic land acquisitions in key locations and growth corridors. Our analysis reveals that the majority of land deals in the past year were made for proposed residential developments. Out of the total 2,181 acres of land transacted between January 2022 and May 2023, approximately 84% (around 1,822 acres) is allocated for proposed residential developments.

Notably, some of the prominent regional developers are expanding into new markets to tap into the growing demand in the top 7 cities. As a result, the outlook for 2023 is bright, with steady growth expected in the mid-segment as well as the premium and luxury segments.

Note: Years to sell (YTS) is calculated as the number of years to sell the unsold inventory considering the rolling eight-quarter average sales of the city.

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 106,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY^SM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.