The Indian housing market witnessed a mixed performance in 2024, marked by a 4% decline in unit sales across seven major cities but a 16% increase in sales value, according to data from real estate consultancy Anarock. While the drop in new housing project launches due to delayed regulatory approvals impacted sales volumes, rising property prices and increased unit sizes drove growth in monetary terms. This year's trends reflect the sector's resilience amidst regulatory hurdles and the dampening effects of general and assembly elections.
Marginal Drop in Sales Volume:
Housing sales across the top seven cities decreased by 4%, with 4,59,650 units sold in 2024 compared to 4,76,530 units in 2023. The decline is attributed to fewer project launches caused by delayed approvals during the election period.
Significant Growth in Sales Value:
Despite the dip in volumes, the overall value of housing sales surged by 16% to Rs 5.68 lakh crore in 2024, up from Rs 4.88 lakh crore in 2023. The increase is driven by rising property prices and a preference for larger unit sizes.
Price Appreciation:
Average housing prices rose by 21% in 2024, fueled by higher costs of land, labor, and raw materials. This price escalation contributed significantly to the growth in sales value despite lower volumes.
Impact of Regulatory Delays:
Regulatory approvals for new projects slowed considerably due to the dual impact of general and assembly elections, resulting in a 7% decline in new housing supply to 4,12,520 units, compared to 4,45,770 units in 2023.
Delhi-NCR:
Housing sales in the Delhi-NCR region declined by 6%, with 61,900 units sold in 2024, down from 65,625 units in 2023.
Mumbai Metropolitan Region (MMR):
MMR showed resilience with a marginal 1% increase in sales, rising to 1,55,335 units from 1,53,870 units the previous year, driven by robust demand for premium housing.
Bengaluru:
Bengaluru recorded a 2% growth in residential property sales, with 65,230 units sold compared to 63,980 units in 2023, reflecting steady demand in the IT-driven city.
Pune:
Sales in Pune fell by 6% to 81,090 units, down from 86,680 units last year, primarily due to a slower pace of new launches.
Hyderabad:
Hyderabad witnessed a 5% decline, with sales dropping to 58,540 units from 61,715 units in 2023, as delayed approvals hampered supply.
Chennai:
Sales in Chennai saw an 11% decline, with 19,220 units sold in 2024 compared to 21,630 units the previous year, reflecting reduced market activity.
Kolkata:
Kolkata experienced the steepest drop among the seven cities, with sales plummeting by 20% to 18,335 units from 23,030 units in 2023, owing to weak market sentiment and limited new supply.
Mixed Outcomes in 2024:
Anarock Chairman Anuj Puri described 2024 as a "mixed bag" for the housing sector. "While sales saw a marginal decline compared to 2023, this was offset by a 16% jump in overall sales value, thanks to average price appreciation and increasing unit sizes," Puri noted.
Election Impact:
Puri highlighted the dampening effects of general and assembly elections, which led to project approval delays and a reduction in fresh housing supply.
Resilience Amidst Challenges:
Despite the decline in sales volumes, the housing market has demonstrated resilience, with rising prices and growing demand for larger homes underpinning its performance.
Focus on Project Approvals:
The sector's recovery will hinge on the swift resolution of regulatory bottlenecks and the timely launch of new projects to meet demand.
The year 2024 highlighted the dichotomy within India's housing market: a dip in sales volumes offset by robust growth in value terms. While regulatory delays and elections posed challenges, the market benefited from rising property prices and a preference for premium housing. As the sector navigates these dynamics, timely project approvals and innovative strategies will be critical in sustaining growth in the years to come.