Indian Residential Real Estate Sector: Exciting 2024 Growth
The Indian residential real estate sector is poised for continued growth, driven by a focus on luxury home launches. According to ICRA, a leading rating agency, the average sale price in the residential segment is projected to increase by 5-6% in the 2024-25 fiscal year. This growth is attributed to the increased emphasis on luxury properties by developers.
ICRA predicts that the total area sold in India’s top seven cities—Mumbai Metropolitan Region (MMR), Delhi-NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai—will rise by 10-12%, reaching 785-800 million square feet in 2024-25. Despite a slight moderation in the sales growth rate, the overall sales velocity, collections, and inventory position are expected to remain robust.
The agency also forecasts a 12% year-on-year increase in new launches, reaching 767 million square feet this fiscal year. Anupama Reddy, Co-Group Head & Vice President of Corporate Ratings at ICRA, noted that the indian residential real estate sector continues to thrive with strong sales and low leverage. The sector experienced a healthy 19% year-on-year growth in residential sales during 2023-24.
In the first quarter of the current fiscal year, the area sold in these major cities saw a moderate 7% year-on-year growth, primarily due to deferred launches. Nevertheless, ICRA expects residential sales to achieve double-digit growth once again, fueled by robust end-user demand and continued affordability, even with some moderation.
The average sale price increased by 11% year-on-year in FY2024 and is expected to rise further by 5-6% in FY2025. This increase is largely due to a shift in the product mix towards luxury units and the pricing flexibility afforded by strong sales and reduced inventory overhang. Overall, the outlook for the indian residential real estate sector remains stable.
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