- Sales of homes priced over INR 10 mn (INR 1 Cr) grew 38% YoY
- Premiumisation continue with sales and launches rapidly rising in INR 10+ Mn segment
- Mumbai contributed 27% to overall residential sales volume
- Bengaluru leads in residential price growth at 12% YoY in 2024
Mumbai: Knight Frank India`s latest report, India Real Estate: Residential and Office (July – December 2024), highlights a robust performance in the residential market, with annual sales reaching a 12-year high of 350,613 units across the top eight markets. Residential sales grew 7% year-on-year (YoY), with Hyderabad and Pune reaching all-time highs and Mumbai recording 96,187 units sold”a 13-year peak, contributing 27% to the overall sales volume. The higher ticket size segments drove momentum despite concerns of overheating, with the INR 20 – 50 million (INR 2- 5 Crores) category witnessing an 85% YoY growth, although the sub-INR 5 million (< INR 50 Lakhs) and INR 5-10 million (INR 50 lakhs – 1 Crore) segments saw declining or fatigued sales.
Residential launches rose by 6% YoY, totalling 372,936 units, with Mumbai leading at 96,470 units. The market health remained robust as the quarters-to-sell (QTS) ratio improved significantly from 9.5 in H1 2021 to 5.8 in H2 2024, indicating strong sales momentum. Backed by sales trends, prices appreciated across all markets, with Bengaluru seeing the highest growth at 12% YoY. These trends underline the continued resilience and evolving dynamics of India`s residential real estate sector.
Shishir Baijal, Chairman & Managing Director, Knight Frank India, said The residential market has had a tremendous run since 2020 with 2024 sales volumes culminating in a 12-year high. The premiumisation trend has intensified as the market continues to shift toward the higher ticket-sizes with products much better suited to the increasing lifestyle needs of the demanding consumer. The overall improvement in market health metrics, stable economic and interest rate scenario along with the still strong momentum hold enough tailwinds for the market as it steps into the new year.
All India Residential Update: January – December 2024
Homebuyer demand remained robust in 2024, driven by stable home loan rates, steady income levels, and improved affordability across most cities. As a result, annual sales volumes reached a 12-year high of 350,612 residential units, reflecting a 7% year-on-year (YoY) growth. Mumbai retained its position as the largest residential market, achieving its highest sales volume in over 13 years, with 96,187 units sold in 2024. This accounted for 27% of total sales across India. Hyderabad and Pune also set new records in primary home sales, with annual volumes of 36,974 and 52,346 units, respectively. Kolkata recorded the highest percentage growth at 16% YoY, followed by Ahmedabad at 15% and Mumbai at 11%. The National Capital Region (NCR), however, experienced a slight decline, with sales volumes contracting by 4% YoY in 2024.
Residential sales have steadily increased since 2020, a pivotal year that marked a significant turnaround for the sector. This growth was supported by policy interventions in certain markets, such as stamp duty rebates in Mumbai, Bengaluru, and Kolkata. However, the primary driver of this resurgence has been the shift in end-user attitudes toward homeownership. The uncertainties of the pandemic, coupled with the need for living and working spaces at home, pushed buyers to prioritize homeownership and invest in amenities that promote a holistic living experience.
Corresponding to this rising demand, development activity accelerated and outpaced sales growth starting in 2022. Residential launches grew by 6% YoY in 2024, reaching 372,936 units”the highest annual launch volume in 12 years. Notably, launches in the higher price segment (INR 10 million and above) increased dramatically, rising from approximately 36,000 units in 2019 to about 184,700 units in 2024”a fivefold increase over five years. Conversely, launches in the sub-INR 5 million category declined by approximately 10% between 2019 and 2024. This shift in the market reflects the evolving preferences of homebuyers, with higher-value homes constituting 50% of all launches in 2024 compared to just 16% in 2019. The doubling of total launch volumes since 2019 highlights the sector’s transformation, driven by changing buyer demand and aspirations.
Gulam Zia, Senior Executive Director, Research, Advisory, Infrastructure, and Valuation Knight Frank India, said With demand scaling to record volumes alongside steady price growth in 2024, momentum in the residential market remains robust. While there are concerns about a deceleration in segments under INR 1 Cr, the government`s steadfast commitment to affordable housing, coupled with increasing private sector interest, should help stabilise volumes in this category. At the same time, the trend of premiumisation continues to shape the market as homebuyers increasingly seek properties that reflect an upgraded lifestyle, offering more space, enhanced amenities, and differentiated living experiences. Developers have adeptly aligned with these evolving preferences, catering to both affordability and aspirations for a better quality of life.
Luxury, Premium and Ultra-Premium sales volume rise
The past few years, particularly since 2020, witnessed a strong trend of premiumisation, reflecting a significant shift in the market toward building and purchasing homes in higher-value categories. Over the last five years, demand for homes priced at INR 10 million and above (INR 1 crore and above) grew substantially. Sales in this segment tripled from over 45,000 units in 2019 across the top eight markets to more than 153,000 units in 2024. This trend became even more pronounced when analysing the subcategories within the INR 10+ million price band.