Pre-sales for residential real estate reached a record high of 301 million square feet in Q3, and KIE predicts further sales momentum in Q4

With pre-sales of 301 million square feet, up 26% YoY and 16% QoQ, residential real estate reached a new high in the third quarter of FY24, surpassing the previous high of 259 million square feet in the second quarter of the fiscal year. According to Kotak Institutional Equities’ study, the sales trend is anticipated to continue as there are many releases scheduled for Q4FY24/ FY2025E. According to Kotak Institutional Equities, price trend was strong during the third quarter, with average realizations of Rs 7609/sqft (11 percent YoY, 3 percent QoQ); Bengaluru and Gurgaon experienced the biggest rises. According to the report, Bengaluru (19% YoY) and NCR (12% YoY) behind Hyderabad (53% YoY) and MMR (28% YoY) in terms of sales growth. In Q3FY24, Godrej, Prestige, and DLF all saw significant pre-sales increases.

As to Kotak’s statement, the total residential sales in all of India for Q3FY24 were 301 million square feet, and for 9MFY24, they were 797 million square feet. These figures place the industry in a strong position to surpass 1 billion square feet for the whole FY2024E year. According to the survey, full-year sales should be supported by the many scheduled launches by major companies in the fourth quarter.

Hyderabad topped the demand in Q3FY24, with sales of 55.9 million sqft because to many launches, including Prestige City. MMR came in second with 48.5 million sqft, Bengaluru came in third with 27.5 million sqft, and NCR came in last with 22.4 million sqft. It said that January 2024, which witnessed sales of 97 million square feet, continued the momentum. At 253 million square feet, launch activity was robust, which helped sales. As of December 2023, total inventory throughout the nation dropped to 1.37 billion square feet, or around 1.4 years’ worth of sales (based on the previous 12 months).

“Q3FY24 sales of Rs 295 billion (9% YoY, 27% QoQ) were recorded in our covered universe, resulting in an all-India market share of 12.9%. The companies with the most pre-sales increase were DLF, Prestige, Godrej, Brigade, Signature, Sobha, and Lodha. We point out that our covered players have 28 million square feet of scheduled launches for Q4FY24, as opposed to 67 million square feet in 9MFY24. This could help the sales performance for the whole year, according to Kotak Institutional Equities Director Murtuza Arsiwalla.

National Capital area (NCR): Better launches at 17.8 million sqft helped the NCR area see a good boost in sales activity during Q3FY24, with 22.4 million sqft (12 percent YoY) of sales. Gurugram remained the top city in terms of sales mix (57%), followed by Greater Noida (15%) and Ghaziabad (12%). As of December 2023, NCR’s net unsold inventory has decreased by 143 million square feet, or almost 2.1 years’ worth of sales (based on the previous 12 months).

With Gurugram at Rs 14,105/sqft and NCR blended realizations up 32% YoY to Rs 13,124/sqft for Q3FY24, the gain was brought about by the sale of the expensive DLF Privana during the period. In January 2024, the rates in Gurugram decreased to Rs 13,563/sqft. Prices in Noida have increased significantly year over year, with an average realization of Rs 12,658/sqft for Q3FY24.

Mumbai Metropolitan Region (MMR): With 48.5 million square feet of residential sales compared to launches of 37.2 million square feet, MMR’s residential sales momentum persisted in Q3FY24. As of December 2023, MMR’s unsold residential inventory accounted for 268 million square feet. We draw attention to the fact that Thane still has 43% of the unsold inventory in the MMR area.

Bengaluru: Thanks to 25.5 million sqft of new releases in Q3FY24, Bengaluru had robust sales of 27.5 million sqft. “We point out that, after a few quarters of lagging behind NCR and MMR, Bengaluru has shown improved pricing and sales performance in the last few quarters. Bengaluru’s average realizations were reported to be Rs 7,958/sqft.

Hyderabad: Due to robust launches of 67.6 million square feet in Q3FY24, Hyderabad experienced very high sales of 55.9 million square feet. Prestige’s launch and sales (Prestige City) would have made a substantial contribution to the quarter’s total. Throughout the quarter, pricing trend persisted, with an average realization of Rs 7,651/sqft.