Residential demand in 13 major Indian cities witnessed a remarkable upswing, recording a 7.8% year-on-year increase and a substantial 10.4% quarter-over-quarter growth during the period of April to June 2023, according to the latest PropIndex Report by real estate platform Magicbricks. The report highlighted Gurugram, Bengaluru, Greater Noida, and Delhi as the cities that experienced the highest quarter-over-quarter surge in residential demand.
The PropIndex Report from Magicbricks also revealed a contrasting trend in residential supply, with a decline of 7.4% quarter-over-quarter and 8.3% year-on-year. This decline in supply indicates a tightening of inventory across the surveyed cities. The widening gap between supply and demand has resulted in an upward pressure on property rates. The report indicated an average increase of 14.7% year-on-year and 2.2% quarter-over-quarter in property rates.
Despite the impact of global macro-economic factors, including rising interest rates, residential demand in India has demonstrated robust growth. This growth can be attributed to the growing significance of home ownership and the sense of security it provides to individuals. However, the report also highlighted a significant disparity between the budget thresholds of buyers and the prevailing residential prices in many micro markets.
Sudhir Pai, CEO of Magicbricks, commented on the findings, stating, “There is a sizable mismatch between the affordability levels of buyers and the residential prices in several micro markets. Hence, there is an urgent need to increase the supply to meet the growing demand, particularly in the affordable and mid-segments of the housing market.”
The Magicbricks report showcases the resilience of the residential sector in the face of challenging economic conditions. The consistent growth in demand indicates a strong preference for homeownership among Indians, bolstered by factors such as favorable government policies, affordable home loan interest rates, and a desire for long-term asset creation.
Among the cities analyzed, Gurugram, a prominent business and technology hub in Haryana, experienced the highest quarter-over-quarter growth in residential demand. Bengaluru, often referred to as the Silicon Valley of India, also demonstrated a significant surge in demand during the same period. Greater Noida and Delhi were identified as other key cities that experienced notable quarter-over-quarter growth in residential demand.
The report’s findings reflect the urgent need for increased residential supply in order to bridge the gap between demand and availability, particularly in the affordable and mid-segments of the market. Policymakers, developers, and industry stakeholders need to collaborate to address this issue and ensure that housing options align with the budget constraints of prospective buyers.
As India continues its journey towards economic recovery and growth, the residential real estate sector is poised to play a vital role in the nation’s development. Meeting the housing demands of a burgeoning population remains a crucial objective, and it is imperative for the industry to proactively respond to the evolving needs of homebuyers.
In conclusion, the PropIndex Report by Magicbricks highlights a significant surge in residential demand across 13 major Indian cities. The report’s findings underscore the need for increased housing supply, particularly in the affordable and mid-segments, to bridge the gap between demand and availability. Despite global economic factors, residential demand in India remains resilient, driven by the desire for homeownership and the sense of security it provides. The industry must work collectively to ensure housing options align with the budgetary constraints of prospective buyers, thereby fostering sustainable growth in the residential real estate sector.
