India's Real Estate Boom: Demand Outstrips New Launches Amidst Premium Housing Surge

In November 2024, India's real estate sector saw surging demand, particularly for premium properties, despite a dip in new launches. The NCR region led with a 44% rise in property prices, indicating strong potential for future growth in the premium housing segment.

November 2024 marked a pivotal moment for India's real estate sector, as demand surged notably, even as new property launches dwindled, according to a report by Nuvama. This disparity between demand and supply highlights an intensified preference for premium properties nationwide.

The report emphasized the ongoing trend of premiumisation within India's property market, a dynamic causing a stark divergence in volume-value trends. Specifically, in the top seven cities, the supply and demand by volume saw respective declines of 53% and 7% year-on-year (YoY). Meanwhile, the premium and luxury segments propelled average property prices in major cities, with the National Capital Region (NCR) experiencing an astounding 44% YoY increase.

Viewed from a value perspective, trends presented a contrasting picture. Although property supply by value dropped 44% YoY, demand rose robustly by 16% YoY. Year-to-date (YTD), there were increases in both supply and demand by value, at 9% and 13%, respectively. Despite a 5% rise in unsold inventory by value, market dynamism was evident with a slight reduction in months of inventory from October's 17 to November's 16, reflecting accelerated sales rates.

In November, housing sales by value grew 16% YoY and 2% month-on-month (MoM). The NCR region led with a stunning 151% YoY sales surge, while Chennai and Kolkata followed suit. Conversely, Hyderabad saw a dip in sales. For 2024, sales value has surged across various cities, with NCR at the forefront with a 68% YoY increase. Despite fluctuations, the real estate sector presents robust medium-term growth potential, driven by favorable cash flows and a burgeoning demand for premium properties.

(With inputs from agencies.)