Realty market outlook increasingly positive in mid-term

By Sudhir Pai

India’s major cities remained bullish in Q3 (July-September) 2024, characterized by strong buyer sentiment and rising demand. Many cities have witnessed a rise in inventory, particularly in the luxury segment, aligning with the growing aspirations of home buyers.

Insights from over 20 million Magicbricks users reveal an 8.3% quarter-on-quarter (QoQ) rise in residential prices and a 12.3% (QoQ) surge in demand. This growth, fueled partly by heightened investor activity, has further propelled price appreciation, especially for luxury properties as buyer preferences shift.

The NCR region continues to pique buyer interest, with Noida (15.6% QoQ), Greater Noida (14.4% QoQ), and Gurgaon (9.9% QoQ) seeing significant demand growth. Delhi (17.2% QoQ) has maintained strong demand despite high property prices. In Bengaluru, a rise in demand is observed where RTM and UC properties both attract buyer interest equally.

This surge in demand has spurred rising prices, with Noida (16.9% QoQ), Greater Noida (15.1% QoQ), and Gurugram (15.5% QoQ) showing the highest capital appreciation, reaffirming their appeal as prime investment destinations and attracting investors. Capital appreciation of residential properties in Thane, too, stands out (9.8% QoQ) driven by a reduction in supply.

The NCR region witnessed new supply, primarily in the luxury (priced above Rs 2.5 crore) segment. Bengaluru and Kolkata were other cities where the supply of under-construction properties increased. The declining availability of affordable housing, coupled with an increase in luxury offerings, suggest a shift toward more aspirational buying patterns across the country.

The Indian residential real estate market appears healthy, though certain signs warrant attention. Demand growth has accelerated, accompanied by a surge in new launches, particularly in the NCR, Kolkata, and Bengaluru markets. The luxury segment, which includes over 45% of under-construction supply in Noida and Greater Noida, is expanding.

This rapid growth may deter genuine homebuyers and raise concerns about potential oversupply and market stagnation. Most regions are experiencing growth based on solid fundamentals and show a promising outlook. Efforts to address the challenges in the affordable housing segment are underway, contributing to an increase in supply. Overall, the market outlook is increasingly positive in the mid-term, with sustained growth expected throughout 2024.

(The author is CEO, Magicbricks)