Hyderabad saw largest absorption of newly-launched homes among top seven cities

HYDERABAD: Hyderabad saw the largest absorption of newly-launched houses among the top seven cities in the country. According to the latest ANAROCK research data, 14,280 units were sold in Q1 2023 – with 46 percent being new launches – compared to the 28 percent (of total 5,400 units sold) in 2019.

While ready-to-move-in homes remain at the top of most home searchers' wish lists in the top seven cities, freshly launched units gained popularity. This traction has grown as branded developers began cornering the fresh supply market with projects that inspire trust among consumers and have all of the features that customers desire.

According to recent ANAROCK Research data, more than 41 percent of the almost 1.14 lakh houses sold in the top seven cities in Q1 2023 were in newly launched projects.

Notably, the sales proportion of newly launched homes was much lower during the same time in 2019, accounting for only 26 percent of the 78,520 sold houses. As against this, about 36 percent of the 99,550 units sold in the top seven cities were launched in the same quarter of 2022.

NCR had the lowest sales share of newly-released units in Q1 2023, at 30 percent. Kolkata with 32 percent, is another city with a low fresh supply absorption share. Interestingly, Mumbai Metropolitan Region(MMR), which had the second lowest absorption on newly-launched units with a 24 percent share in Q1 2019, saw its sales share of new units leap to 40 percent in Q1 2023. Over 40 percent of the 34,690 units sold in MMR's first quarter of 2023 were brand-new launches.

Of the 24,010 units sold over the same period in 2019, 24 percent were brand-new units. Over 30 percent of the 17,160 units sold in NCR's first quarter of 2023 were also newly-launched houses during that period. Out of 13,740 units sold in the first quarter of 2019, 21 percent were newly-launched projects.

In Chennai, newly-launched units accounted for 41 percent of the total 5,880 units sold in the first quarter of 2023. This is an increase from the 29 percent of the 3,430 units sold in the first quarter of 2019. More than 38 percent of the 6,190 units that were sold in Kolkata during the first quarter of 2023 were brand-new. In the first quarter of 2019, 4,020 units were sold, with new projects making up for 24 percent of all sales.

The proportion of newly launched units sold in Bengaluru increased from 28 percent of 15,580 units sold in the first quarter of 2019 to 43 percent of 15,660 units sold in the first quarter of 2023.

The proportion of newly-launched units sold in Pune climbed from 35 percent of 12,340 units sold in the first quarter of 2019 to 45 percent of 19,920 units sold in the first quarter of 2023. The city has the second-highest sales proportion of newly-introduced units after Hyderabad.

Anuj Puri, Chairman – ANAROCK Group, says, “For the longest time, ready-to-move-in homes remained in the highest favour with home buyers because of the previously abysmal project completion track record in many areas of the country. This is now changing – under-construction homes in new launches are increasingly finding takers, though ready-to-move-in homes retain the top demand slot."

There are two reasons for this, explains Puri. “Firstly, much of the new supply is by well-funded and branded developers who will comply with RERA regulations and complete their projects as per schedule. In Q1 2023, of 1.14 lakh new units launched in the top seven cities, the branded vs non-branded developer share ratio stood at 59:41 back in 2015. It was the reverse at 41:59. Secondly, investors are back in the housing market. Early-stage under-construction homes offer the kind of cost arbitrage that make residential real estate attractive to investors, who have largely given housing a miss over the last 3-4 years. It is a heartening trend for the residential market in the remainder of 2023.”

This trend bears watching, as it has strong mid-to-long-term implications for the Indian residential property market. While the return of investors were positive for overall sales, an end-user driven market helps keep prices in check. Accelerated investor activity has historically led to unreasonable price hikes which eventually throttled back the overall housing market growth story.

City-wise Absorption Trends