Double-Digit Growth Expected For Residential Sales In Top Indian Cities
Indian real estate is showing positive signs with a projected increase in residential sales for the top seven cities in FY25 (Financial Year 2025). Driven by strong end-user demand and healthy affordability, housing sales are expected to witness double-digit growth, according to a report by rating agency ICRA.
ICRA Forecasts Upbeat Housing Market
The report, released in August 2024, predicts an area sold increase of 10-12 per cent to reach 785-800 million square feet in FY25. This comes on the heels of a healthy 19 per cent year-on-year growth in residential sales observed during FY24.
Healthy Sales Momentum Expected to Continue
Despite a slight moderation in sales growth rate, ICRA anticipates overall sales velocity, collections, and inventory levels to remain positive. This indicates a continued healthy sales environment for the Indian property market.
New Launches to Rise on Back of Favourable Conditions
The report also highlights a projected 12 per cent year-on-year increase in new property launches across the top seven cities. This surge is attributed to a combination of factors, including a decadal low in existing inventory, a comfortable years-to-sell ratio, and robust buyer demand.
Average Property Prices Poised for Increase
The report also forecasts a rise in average property prices by five to six per cent during FY25. This increase is attributed to a shift in the product mix, with developers focusing on launching more luxury units. Additionally, healthy sales and lower inventory levels are expected to provide developers with greater pricing flexibility.
Outlook for Real Estate Remains Stable
Despite the anticipated price increase, ICRA maintains a stable outlook for the real estate sector. This stability is supported by factors like healthy cash flows, manageable leverage levels, and a growing demand for rental housing due to limited ready-to-move-in inventory.
Overall, the ICRA report paints a positive picture for the Indian residential real estate market in FY25. With a projected increase in sales, launches, and stable affordability, the sector appears poised for continued growth.
